German sportswear company Adidas reported better than expected first quarter sales growth on Tuesday, helped by a strong performance from its running and fashion businesses as well as a recovery at its struggling North America arm.
Adidas said sales rose 17 per cent to €4.083 billion ($4.54 billion), or by 9 per cent excluding the impact of currencies, which was ahead of average analyst forecasts for €3.913 billion.
“After getting off the starting block well this year, we are optimistic about our prospects for the full year,” Chief Executive Herbert Hainer said in a statement.
Adidas launched a new five-year strategy last month that focuses on speeding up its supply chain and achieving success in the US market and the world’s largest cities. It aims to lift sales by almost half to above €22 billion by 2020.
In North America, where Adidas has been spending heavily on marketing to try to make up ground lost to market leader Nike as well as fast-growing Under Armour, currency-neutral sales rose 7 per cent in the first three months of the year after a 4-per cent fall in 2014.
Hainer, who faced calls to step down last year after a series of profit warnings, had indicated that first-quarter results would be strong in a weekend newspaper interview.
Adidas said in February its board had launched a formal search for a successor to Hainer, although the long-serving CEO has a contract until 2017 and seems in no hurry to leave.
Attributable net profit rose 8 per cent to €221 million, below forecasts for €232 million but including a goodwill impairment of €18 million due to a change in reporting.
Adidas reiterated it expected 2015 sales to rise by a medium single-digit percentage rate on a currency-neutral basis, after a 6-per cent increase in 2014, while net profit from continuing operations should climb 7-10 per cent.
Adidas achieved double-digit sales growth in running and at its sports-inspired fashion brands Originals and NEO. Fitness brand Reebok reported a currency-neutral rise of 9 per cent, compared to just 1 per cent in the fourth quarter.