Adidas AG (ADS - Get Report) shares slumped to the bottom of the German market Thursday after the world's second-largest sportswear group posted weaker-than-expected second quarter sales as growth in north America slowed.
Adidas said earnings for the three months ending in June rose 13% from the same period last year to €2.33 per share, topping analysts' forecast of €2.30 per share, but noted that revenues tallied €5.51 billion on a currency-adjusted basis, just shy of the €5.54 billion Refinitiv forecast.
Looking into 2019, Adidas confirmed its full-year outlook for currency-neutral sales to grow at a rate of between 5% and 8%, with gross margins improving by 20 basis points from last year to 52% and operating margins rising between 50 and 70 basis points to between 11.3% and 11.5%.
"We delivered another successful quarter. Sales in our strategic growth areas Greater China and e-commerce continued to increase at a double-digit rate - and so did our bottom line," said CEO Kasper Rorsted. "We remain confident about the sequential revenue acceleration in the second half of the year and confirm our top- and bottom-line outlook for 2019."
Adidas shares were marked 1.72% lower on the Deutsche Boerse in Frankfurt and changing hands at €269.05 each by mid-morning, a move that still leaves the stocks some 47.5% higher since the start of the year.
Revenues in North America increased 5.8%, Adidas said, reflecting a 5% increase at brand 'adidas' and 10% growth for Reebok, but both figures trailed the combined growth rate of 16% recorded over the same period last year and suggest that Nike Inc. (NKE - Get Report) is starting to win back market share on its home turf.
Nike's group revenues for the three months ending in May rose 4% to an estimate-beating $10.18 billion as Nike-branded sales rose 10% on a currency-neutral basis to $9.7 billion and China sales surged 15.5% to $1.697 billion, the company said earlier this spring.