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UPDATE 2-Adidas profits beat forecasts, shares hit record high

Emma Thomasson

* Adidas operating margin overtakes Nike

* Ecommerce sales up 40 pct

* Q1 sales up 4 pct to 5.883 bln euros

* Q1 attrib. net profit 632 mln euros vs consensus for 567 mln

* Shares up 6.4 pct, hit record high (Adds details, analyst comment, updates shares)

BERLIN, May 3 (Reuters) - Adidas reported a forecast-beating rise in quarterly profits on Friday, helped by high-margin ecommerce, even as overall sales growth slowed due to supply chain problems in the North American market, as well as a decline in Europe.

Shares in the German sportswear maker, which have risen by a quarter this year, jumped 6.5 percent to a new record high.

Chief Executive Kasper Rorsted has put a big focus on improving profitability at Adidas since he took over in 2016, by focusing on growing in North America and Asia and pushing ecommerce, where margins are higher than selling wholesale.

On Friday, Rorsted reiterated that he was confident sales growth would pick up in the second half of the year.

In the first quarter, Adidas said its operating margin rose 1.4 percentage points to 14.9 percent, pulling ahead of bigger rival Nike, which recorded an operating margin of 13.5 percent for the December to February period.

Adidas said profitability had been helped by lower sourcing and marketing costs, favourable currency developments as well as selling more higher priced products and the expansion of online, with ecommerce sales up 40 percent in the quarter.

"Earnings are much better than guided for the full year leaving the door open for margin guidance upgrades in the course of the year 2019," said Baader Helvea analyst Volker Bosse, who rates the stock "hold".


First-quarter sales rose by a currency-adjusted 4 percent to 5.883 billion euros ($6.57 billion), while attributable net profit rose 17 percent to 632 million, beating analyst consensus for 5.8 billion and 567 million respectively.

Adidas warned in March that it expects supply chain issues to curb sales growth in the first half of the year, particularly in North America, where it has doubled its business in the last three years to take market share from Nike.

Sales growth in North America, where Nike and Under Armour have also reported weakness, slowed to just 3 percent in the quarter, while revenues declined 3 percent in Europe, where Adidas admits it has been too reliant on fashion shoes.

Sales were also dented by the non-recurrence of revenue related to last year's soccer World Cup. The struggling Reebok fitness brand saw sales fall 6 percent.

Adidas reiterated it expects sales growth of just 3-4 percent in the first half of the year, speeding up in the second half as it ramps up supplies by reallocating factory capacity and prioritising the U.S. market.

Meanwhile, smaller rivals are powering ahead: Puma posted a record quarter last week, with currency-adjusted sales up 15.3 percent, while Under Armour Inc raised its full-year earnings forecast on Thursday.

($1 = 0.8952 euros) (Reporting by Emma Thomasson, editing by Riham Alkousaa and Emelia Sithole-Matarise)