Adidas leaps to higher profits on strong own-brand sales

Frankfurt am Main, Germany | AFP | German sports gear group Adidas on Thursday reported a jump in third-quarter profits, lifted by strong demand for its own-brand trainers and apparel in China and North America.

The Bavarian company, which sponsors English Premier League giants Manchester United, said net profit soared to 526 million ($611 million) between July and September, up 36 percent on the same period last year.

Group revenues grew by nearly nine percent to 5.7 billion euros, driven by online sales and the success of Adidas’ retro-inspired Originals trainers and its adidas neo urban fashion line.

Demand was especially robust in the key markets of China and North America, where sales of the three-striped brand increased by around a third, Adidas said in a statement.

Chief executive Kasper Rorsted said he was pleased “with the quality of our growth” as he reaffirmed the group’s 2017 outlook.

“We delivered another set of strong results and are fully on track to achieve our ambitious 2017 financial targets,” he said in a statement.

Adidas said it continues to expect group sales to grow by 17 to 19 percent in 2017 to achieve a net profit between 1.36 and 1.39 billion euros.

The only region that didn’t see growth in the third quarter was Russia, with Adidas blaming the 17-percent decline in sales on “ongoing challenging consumer sentiment” and store closures.

Another cloud came from the group’s troubled Reebok brand, which saw revenues increase by just one percent over the same period.

Adidas bought the US fitnesswear specialists in 2005 in a bid to narrow the gap with its main rival Nike, but Reebok has struggled to impress at the group and is now undergoing a restructuring.