Adidas expansion in China and US boosts third-quarter profit

0
11

German sportswear firm Adidas reported another strong quarter of sales and profit growth, driven by expansion in China and North America, where it has been taking market share from arch rival Nike.

Third-quarter sales rose 9 per cent to €5.6bn (£5bn), while net profit jumped more than a third to €526m, versus average analyst forecasts for €5.86bn and €512m respectively.

Sales of the Adidas and Reebok brands rose 28 per cent in greater China and 23 per cent in North America, but fell 17 per cent 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.

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.

Adidas, which hiked its full-year outlook in July, reiterated its forecast for 2017 currency-neutral sales to rise between 17 and 19 per cent and for net income to increase at between 26 and 28 per cent.

Reuters