• Adidas Q1 net income jumped 17% to EUR542m (US$649m) from $462m last year.
  • Gross margin rose 1.5 percentage points to 51.1%.
  • Group revenues were up 2% to EUR5.55bn – a currency-neutral rise of 10%.
E-commerce was once again the fastest-growing channel with an increase of 27%

E-commerce was once again the fastest-growing channel with an increase of 27%

Adidas has confirmed its full-year guidance after booking a "successful" start to the year, which saw the German sportswear giant book double-digit top and bottom-line growth in the first quarter.

Net income from continuing operations in the three months to 31 March jumped 17% to EUR542m (US$649m) from $462m in the year-ago period, while the company's gross margin increased 1.5 percentage points to 51.1%, compared to 49.6% last year. The development was despite a significant currency headwind in the quarter, which was more than offset by the positive effects from a better pricing and product mix.

The latest set of results saw group revenues climb 2% to EUR5.55bn – a currency-neutral rise of 10% – reflecting an 11% increase at the Adidas brand that was driven by double-digit increases in the running, football and training categories as well as at Adidas Originals.

Revenues at the Reebok brand, however, fell 3% due to declines in the training and running categories, while e-commerce was once again the fastest-growing channel with an increase of 27%.

From a market segment perspective, on a currency-neutral basis, the combined sales of the Adidas and Reebok brands grew in all regions except Russia/CIS. Growth was particularly strong in North America (+21%) and Asia-Pacific (+15%), the latter driven by a 26% increase in Greater China. While Latin America also grew at a double-digit rate (+10%), revenues in Western Europe increased 5%, in line with the full-year outlook for the market.

Meanwhile, sales in emerging markets and Russia/CIS declined 5% and 16%, respectively, as a result of the challenging market conditions.

"We had a successful start to the year that was fully in line with our expectations; our high-quality top-line growth was driven by our strategic focus areas North America, Greater China and e-commerce," said CEO Kasper Rorsted. "At the same time, we managed to grow the bottom line significantly faster than the top line while continuing to invest into creating brand desire."

For 2018, Adidas continues to expect sales to increase at a rate of about 10% on a currency-neutral basis driven by double-digit growth in North America and Asia-Pacific.

Net income from continuing operations is projected to increase to a level between EUR1.62bn and EUR1.68bn, reflecting an increase of between 13% and 17% compared to the prior year level of EUR1.43bn, excluding the negative one-time tax impact recorded in 2017.