ADS Adidas AG

By William Boston 

BERLIN -- Germany's Adidas AG reported higher quarterly earnings on strong sales in China and predicted continued growth in the second half, a rare upbeat note in a country where companies have been pressured by the U.S.-China trade dispute.

The maker of sporting attire and equipment said Thursday that net profit in the second quarter was EUR531 million ($595 million), up 34% from a year ago. Sales in the period rose 4.7% to EUR5.5 billion. Analysts had forecast net profit of EUR464.7 million and sales of EUR5.54 billion.

Growth in revenue was driven by China, the mainstay Adidas and Reebok brands, and e-commerce. But revenue was damped by a decrease in sales of soccer products, which were up sharply last year because of the FIFA World Cup.

Barring a few highlights, such as a surprisingly upbeat quarterly report from car maker Volkswagen AG, many companies in Germany's blue-chip DAX 30 index have posted disappointed earnings this year because of factors ranging from poor strategic decisions to the impact of the global trade tensions and subdued demand at home.

Adidas's sales on a currency-neutral basis grew in most regional markets, posting double-digit growth in China and other emerging markets. Sales in North America rose 6%, driven by growth in Reebok brand products, and were up 5% in Latin America. The company continued to struggle in Russia, where sales declined 4% in the quarter.

The boost in North American sales, including a 10% increase at Reebok, is positive for Adidas, which is engaged in tough competition with U.S. rivals Nike Inc. and Under Armour Inc. As a result of rapid growth in the U.S., Adidas faced considerable supply-chain hiccups and warned earlier this year that the bottlenecks would weaken sales growth.

--Cristina Roca contributed to this article.

Write to William Boston at william.boston@wsj.com

(END) Dow Jones Newswires

August 08, 2019 03:51 ET (07:51 GMT)

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