German sportswear firm Adidas hiked its 2018 profit guidance, citing a strong financial performance in the first nine months of the year, but trimmed revenue target due to weaker-than-expected growth in western Europe.
While Adidas has been taking market share from bigger rival Nike in North America, the U.S. firm has been powering ahead in Europe, Middle East and Africa, where its sales rose 9 percent in the three months ended August.
Adidas CEO Kasper Rorsted told CNBC on Wednesday that the company had seen a "stellar quarter" and would see a stellar year.
"Despite the fact that we're investing more than ever in our company and in managing investments, we will have the highest margin in the history of the company which is 10.8 percent by the end of the year so we're extremely happy with the overall run of our business, particularly in the U.S., in Asia and online," he told CNBC's Squawk Box Europe.
Adidas had already warned that sales in western Europe were likely to stay flat in the second half of the year after the company failed to focus enough on the launch of more products.
Rorsted said the European economy is "more impacted than any other economy" by a lack of consumer confidence which is affecting spending, with Brexit – which he called the "most unwise decision from an economic standpoint in the last 30 years" – a particular worry, he said. He was confident that China, on the other hand, would continue to be a "very strong growth driver for years to come" for the brand.
The group said on Wednesday it now saw its net income from continuing operations growing 16 to 20 percent between 1.66 billion to 1.72 billion euros ($1.90-1.97 billion), compared with previous guidance for 13 to 17 percent growth.
It now expects its full-year currency-neutral sales to grow by 8 to 9 percent, less than the previous forecast for an increase of around 10 percent.
Third-quarter sales rose a currency-adjusted 8 percent to 5.873 billion euros, compared with analysts' forecast of 5.92 billion euros, while net profit from continuing operations jumped 19 percent to 656 million euros, beating consensus for 619 million euros.