Adidas AG (ADDYY) shares were marked lower in early European trading after the sportswear group posted a stronger-than-expected set of first quarter earnings but said its struggling Reebok brand continues to weigh on its bottom line.
Adidas said net income for the three months ending in March came in at €542 million, while diluted earnings per share were pegged at €2.65, both figures topping analysts' estimates. Group sales, Adidas said, rose 10% on a "currency neutral" basis, which strips out changes in the value of the euro, to €5.548 billion, matching analysts' forecasts. Reebok brand revenues fell 3%, Adidas said, citing "declines in the training and running categories".
"We had a successful start to the year that was fully in line with our expectations," said CEO Kasper Rorsted. "Our high-quality top-line growth was driven by our strategic focus areas North America, Greater China and e-commerce."
Adidas shares were marked 1.6% lower in the opening hour of trading in Frankfurt and changing hands at €204.80 each, a move which trims the stock's year-to-date gain to around 22%, well ahead of the 9.1% gain for rival Nike Inc. (NKE) - Get NIKE, Inc. Class B Report
Adidas held to its 2018 forecasts of 10% sales growth and an operating margin -- a key measure of profitability -- that will sit in a range of 10.3% to 10.5%.
China one again proved to be a crucial market for the German sportswear giant, with sales growth of 26% over the three month period. That compares to Nike's overall 21% gain -- to $1.336 billion -- in overall sales for the three month period that ended in February.
Adidas also saw 21% sales growth in North America, where it continues to challenge Nike for home-court dominance. Nike's last February-quarter North American sales fell 6% to $3.57 billion.
Adidas has used its first-mover advantage in e-commerce to build those regional gains, with online sales rising 27%, the company said, representing the Herzogenaurach-based group's fastest-growing business channel.