The logo of Adidas is seen on a shirt in Herzogenaurach, southern Germany. German sportswear maker Adidas reported yesterday that efficiency savings had powered a leap in profits in the first quarter, staying confident of hitting its full-year targets as
Frankfurt am Main: German sporting goods firm Adidas said Thursday efficiency savings had powered a leap in profits in the first quarter, staying confident of hitting its full-year targets as the World Cup looms.
Net profit attributable to shareholders surged 18.7 percent year-on-year, to 540 million euros ($647 million) between January and March.
Operating or underlying profit increased 17.1 percent to 746 million euros, far outpacing revenue growth of just 1.9 percent, to 5.5 billion.
"We managed to grow the bottom line significantly faster" than revenues, chief executive Kasper Rorsted highlighted, "while continuing to invest into creating brand desire."
The group added that adjusting for currency effects, sales had increased around 10 percent, powered by Adidas' fashion-oriented Originals line as well as its running, training and football segments -- the last in starker focus this year with the Russia World Cup kicking off in June.
US sports subsidiary Reebok suffered a 3.0-percent fall in sales, although it managed a rebound in America itself and Rorsted promised further investments in the brand.
Adidas saw especially powerful revenue growth in North America, at 21 percent, and China at 26 percent.
Growth in the Asia-Pacific regions overall and Latin America was also in the double digits.
Meanwhile western Europe added just 5.0 percent while sales fell in Russia, eastern Europe and central Asia.
Russian sales are a particular dark spot, having fallen from 10 percent to just 3.0 percent of Adidas' global turnover in the past five years.
The firm has closed around 100 of its 700 stores in the country as economic woes continue to bite.
Meanwhile, Adidas would face "very little impact" if a trade war breaks out between Washington and Beijing, Rorsted said, as its biggest manufacturing sites are in Vietnam and Indonesia rather than China.
Historic German rival Puma said in April it was working on contingency plans to move some production from China to other Asian countries, faced with US President Donald Trump's threats to impose tariffs on tens of billions of dollars in imports from the world's second economy.
Looking ahead to the full year, Adidas expects a roughly 10-percent increase in worldwide currency-adjusted sales, again fuelled by North America and Asia-Pacific.
As its drive to increase margins continues, the group aims for a faster increase in net income from continuing operations of between 13 and 17 percent, at up to 1.675 billion euros.
Shares in Adidas lost 0.8 percent by early afternoon in Frankfurt, trading at 205.50 euros around 1140 GMT.
