Adidas sales rise marks start of campaign to close gap with Nike

Adidas sales rose 17 per cent in the first three months of the year, as it reported its first results since unveiling a five-year strategy designed to close the gap on arch-rival, Nike.

In the three months to the end of March, the world's second largest sportswear group by sales posted revenues of €4.08bn, up from €3.48bn a year earlier. Analysts had forecast €3.91bn according to a Reuters poll.

The pick-up in sales was driven by an improvement in Adidas's underperforming US business, and strong growth in China, with sales rising 28 per cent and 44 per cent respectively.

However, the euro's weakness also played a role in the increases. Excluding the impact of exchange rate fluctuations, sales in the US were up 7 per cent, and sales in China were up 21 per cent. Group sales were up 9 per cent on the same basis. Net income rose 8 per cent to €221m - or €1.15 per share.

Herbert Hainer, chief executive, said that the results showed that Adidas had "[got] off the starting block well" and added that he was optimistic about the German group's prospects for the full year.

At a strategy presentation in March, Adidas said that it aimed to boost its annual revenues by almost 50 per cent to more than €22bn by 2020, as well as double its net profits over the same period.

The new plan is an effort by the German group to revive its fortunes after a difficult 18 months, in which it was forced to issue two profit warnings and abandon a previous set of financial goals.

Adidas also lost its number two position in the crucial US market to US brand Under Armour, a setback that Mr Hainer conceded in March was a result of Adidas being "too static and not agile enough".

Mr Hainer struck a cautious note on the group's business in Russia, where sales fell 3 per cent in the first quarter amid a decline in the value of the rouble and fragile consumer confidence.

However, Adidas reiterated that it expects overall sales to grow at "mid-single-digit" rates this year, thanks to rising consumer confidence in most other regions, as well as continuing support from the weakness of the euro, in particular against the renminbi and the dollar.

Shares in Adidas were up 2.8 per cent at €77.72 in early morning trading in Frankfurt.

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