ADS Adidas AG

By Cristina Roca

Adidas AG (ADS.XE) reported third-quarter results on Wednesday. Here's what we watched:

SALES: The sporting-goods giant posted sales of 6.41 billion euros ($7.16 billion) for the quarter, beating a consensus forecast of EUR6.32 billion, according to estimates provided by FactSet.

NET PROFIT: Adidas's net profit was lower year-on-year, but came in above expectations at EUR646 million compared with a EUR635 million consensus forecast provided by FactSet.

WHAT WE WATCHED:

-BOTTOM LINE DEVELOPMENT: As flagged ahead by the company, Adidas's earnings development wasn't as strong in the third quarter, but it wasn't as weak as expected, either. Gross margin progressed by 30 basis points against expectations of it falling, helped by a more favorable channel mix and supportive foreign-currency effects, which offset a series of headwinds including higher transportation costs and price investments in Europe, Bryan Garnier analysts said. However, as predicted by Credit Suisse analysts, Adidas's 3Q update failed to excite investors, and at 1036 GMT, shares in the company traded 2.9% lower at EUR273.15.

-SALES GROWTH SPED UP: Adidas's organic sales growth sped up to 6% in the quarter, from 4% in the first half, and management said in a conference call that for 2019 it expects to hit the middle of its 5%-8% organic sales growth guided range, i.e. around 6.5%. By category, apparel sales grew by double-digits, while footwear sales only advanced 1% due to high comparison bases from the year before, when Yeezy products boosted sales.

-MANAGEMENT CHANGES: Adidas thanked departing Head of Global Brands Eric Liedtke, and said he was leaving to move to the U.S. The company didn't give any more details on the coming strategic plan.

Write to Cristina Roca at cristina.roca@dowjones.com; @_cristinaroca

(END) Dow Jones Newswires

November 06, 2019 06:03 ET (11:03 GMT)

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