German sportswear firm Adidas posted another strong quarter of sales and profit growth Thursday, driven by expansion in China and North America, where it has been taking market share from archrival Nike.
Here are the key third-quarter metrics:
- Net profit: 526 million euros ($610 million) vs. 512 million euros expected, according to Thomson Reuters
- Sales: 5.677 billion euros, vs. expected 5.86 billion euros, according to Thomson Reuters
Adidas reported third-quarter sales rose 9 percent, while net profit jumped more than a third. Adidas, which hiked its full-year outlook in July, reiterated its forecast for 2017 currency-neutral sales to rise between 17 and 19 percent and for net income to increase at between 26 and 28 percent.
“Overall an extremely strong quarter across the board for us, so we are exceptionally happy,” Kasper Rorsted, CEO at Adidas, told CNBC Thursday.
Rorsted also said that ahead of the upcoming soccer World Cup in Russia, he was “quite optimistic” growth in the fourth quarter would outperform previous years.
Sales of the Adidas and Reebok brands rose 28 percent in greater China and 23 percent in North America, but fell 17 percent in Russia, which Adidas blamed on the “ongoing challenging consumer sentiment” and store closures.
Adidas saw double-digit sales increases in its running and outdoor categories as well as at its Originals and Neo fashion labels, but said revenues fell from soccer and basketball, mainly due to the termination of two major sponsorship deals.
Adidas and fellow German brand Puma have been gaining market share in North America as customers snap up their retro styles and lifestyle shoes instead of basketball and sports performance gear, hurting Nike and Under Armour.
Rorsted said that while Adidas was starting to gain traction in the U.S. market, the company should remain cautious for now.
“We still have a very long way to go, we are by no means where we want to be in the U.S. so that is why we continue to overinvest,” he said.
Nike posted its slowest quarterly sales growth in nearly seven years in September, while Under Armour slashed 2017 sales and profit forecasts last month and reported its first year-on-year fall in revenue in the third quarter.
Source: cnbc
Adidas reports strong growth in North America, China