Adidas sales shoot up as income surges
E-commerce sales jumped 76 per cent in the third quarter
Adidas raised its 2018 profit forecast on Wednesday after selling more of its top-end sports shoes, although the German sportswear and fashion company cut its revenue target due to a fall in sales in western Europe.
Chief executive Kasper Rorsted has focused on improving profitability at Adidas, which long lagged behind bigger rival Nike, since he took over in 2016, in part by simplifying product ranges and pushing e-commerce, where margins are higher.
Shares in Adidas, which have gained 12 per cent in the past year, were indicated up 1.9 per cent after it said it expects its net income from continuing operations to grow 16 to 20 per cent to between €1.66 billion (Dh6.98) to €1.72bn, compared with previous guidance of 13 to 17 per cent.
But it cut its 2018 target for currency-neutral sales growth to between 8 to 9 per cent from "around 10 per cent".
While Adidas has been taking market share from Nike in North America, the US company has been powering ahead in Europe, Middle East and Africa, helped by a big push in football.
German rival Puma raised its outlook for full-year sales and operating profit last month as it reported strong sales growth in the Americas and Asia and said its first basketball shoe in 20 years had been well received.
Adidas had already warned that sales in western Europe were likely to stay flat in the second half after it failed to focus enough on launching more products.
On Wednesday, Adidas said currency-adjusted sales in the region fell 1 per cent in the third quarter, while they rose 16 per cent in North America and 15 per cent in Asia-Pacific. E-commerce sales jumped 76 per cent in the three-month period.
Third-quarter sales rose by a currency-adjusted 8 per cent to €5.87bn, shy of analysts' forecast of €5.92bn, while net profit from continuing operations jumped 19 per cent to €656 million, beating consensus.
Updated: November 7, 2018 03:11 PM