Adidas on Thursday confirmed its outlook for the year coming off double-digit top- and bottom-line growth in the first quarter, driven by its strategic focus areas: North America, Greater China and e-commerce.
The Herzogenaurach, Germany-based sporting goods firm said net profit in the three-month period ended March 31 rose 18.6 percent year-on-year to 540 million euros ($647 million), boosted by an 11 percent increase at its Adidas brand and double-digit increases in the running, football and training categories, as well as at Adidas Originals. Sales at Reebok dipped 3 percent due to declines in the training and running categories.
In terms of regions, the company saw double-digit growth in North America, the Asia-Pacific region — led by China, which saw a 27 percent increase in sales on a currency-neutral basis — and Latin America, offsetting declines of 5 percent and 16 percent in emerging markets and Russia, respectively, as a result of challenging market conditions.
Sales in the period inched up 1.9 percent to 5.59 billion euros. E-commerce remained the fastest-growing channel, with an increase of 27 percent.
Gross margin, a key indicator of profitability, grew by 1.5 basis points to 51.1 percent, versus 49.6 percent in the equivalent year-ago period, with the positive effects from a better pricing and product mix offsetting significant currency headwinds, Adidas said.
The German activewear giant confirmed its forecast for 2018, saying group sales were expected to increase at a rate of around 10 percent on a currency-neutral basis, driven by double-digit growth in North America and Asia-Pacific. Net income from continuing operations is set to rise to between 1.62 billion euros and 1.68 billion euros. Gross margin is set to inch up 0.3 basis points to a level of up to 50.7 percent, versus 50.4 percent in 2017, Adidas said.