Adidas Earnings Beat Estimates on North America Sales Momentum

(Bloomberg) --

Adidas AG beat earnings estimates as sales picked up in the U.S. after months of trouble there from supply-chain snags.

• Currency-neutral sales rose 6% in the third quarter. Total revenue reached 6.4 billion euros ($7.1 billion), narrowly exceeding the average estimate. Operating profit of 897 million euros also topped the consensus.

Key Insights

• The European market also seems more promising as sales returned to growth, rising 3.2%. Adidas is hoping its home market can become a motor again, helped in part by next summer’s European Championships soccer tournament.
• Investors will want to know whether Adidas has completely resolved the supply issues in North America. The cost of flying clothing across the Pacific has been weighing on earnings. Sales in the region jumped 16%.
• While Rorsted downplayed the threat of U.S.-China tariffs in August, he’ll nonetheless field questions about his latest views, especially after the CEO of rival Puma SEsaid in October that such measures are affecting earnings.

Market Performance

• The Herzogenaurach-based company’s stock has climbed more than 50% this year and is on pace for its fifth straight annual gain.

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• Link to statement.

To contact the reporter on this story: Tim Loh in Munich at tloh16@bloomberg.net

To contact the editors responsible for this story: Eric Pfanner at epfanner1@bloomberg.net, Thomas Mulier

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