Adidas Announced Its Q3 Earnings Report. There Are Also Worries Behind Its Success.

Beijing time on the evening of November 7th, Adidas announced the third quarter earnings.

Adidas Greater China reproduced double-digit growth in the third quarter, excluding exchange rate factors. In the third quarter of 2018, Adidas's Greater China sales increased 26%, showing excellent performance.

2018 third quarter

And the Greater China Performance Summary: excluding exchange rate factors, sales in the Greater China region increased by 26%; excluding the exchange rate factor, the Asia Pacific market sales increased by 15%; the global performance summary: excluding exchange rate factors, sales growth by 8%; increasing by euro by 3%; gross margin increasing 1.4 percentage point to 51.8%; battalion profit growth 1.3 percentage point to 15.3%; net income from continuous operation increased 19% to 656 million euros; and sustained earnings growth of basic earnings per share from 21% to Euro euro;

Asia Pacific market and greater China Performance:

Excluding the exchange rate factor, Adidas's Greater China sales increased by 26% in the third quarter of 2018.

Thanks to the promotion of Greater China, excluding the exchange rate factor, the Asia Pacific market recorded a double-digit growth rate of 15% over the same period.

Mr. Gao Jiali Colin, managing director of Adidas Asia Pacific and managing director of Greater China, said: "strong consumer demand and exciting new products will boost Currie.

The Greater China region and the Asia Pacific market have been developing steadily towards a solid development year.

The sales growth of Adidas Greater China reached 26% in the third quarter. It has recorded more than 20% sales growth for eleventh consecutive quarters, and has further promoted regional growth.

The Asia Pacific market is still Adidas's largest and most profitable market in the world.

In the future, we will accelerate the process of marketization and enhance the digitalization level under the guidance of "Li Xin" strategy. Taking consumers as the center is the top priority and will provide the best brand experience for them.

Excluding the exchange rate factor, global sales in the third quarter of 2018 increased by 8%; in the third quarter of 2018, excluding the exchange rate factor, Adidas's global sales increased 8%.

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Brand revenue increased by 10%, mainly due to sports.

The series recorded two digit growth and a high single digit growth in sports performance series, and training category and running category once again achieved two digit growth.

Reebok's brand revenue declined by 5%, and sales of training series and running series dropped, offset the classic double digit growth.

In terms of channels, global sales growth benefited from strong double-digit growth in retail channels, of which e-commerce business recorded a 76% growth in the quarter.

According to the euro, global sales increased by 3% to 5 billion 873 million euros in the third quarter of 2018 (2017: 5 billion 677 million euros).

Adidas Global CEO Rothd (Kasper Rorsted) said: "we did better in the third quarter.

Strong business growth has benefited from double-digit growth in our strategic growth areas, namely North America, Greater China and e-commerce.

At the same time, despite the negative impact of a significant increase in market input and severe exchange rate decline, we have achieved a very profitable growth.

Based on this, we are confident that we will achieve the expected level of profitability in 2018 and are steadily advancing towards the long-term goal of 2020.

Adidas optimistic about 2018 annual performance prospects

Based on the excellent performance of the first 9 months of 2018, Adidas has increased its profit forecast for the whole year and has defined the target area of revenue growth.

Excluding the exchange rate factor, Adidas expects global sales growth to be around 8% to 9% in 2018, slightly below the projected range (earlier: about 10%), mainly because the growth level in Western Europe is slightly below the projected level.

At the same time, the net revenue generated by the continuous operation business is expected to grow to 1 billion 660 million to 1 billion 720 million euros, increasing 16% to 20% on the basis of 1 billion 430 million euros last year (previously: 13% to 17%, reaching 1 billion 615 million to 1 billion 675 million euros).

The gross profit margin of the company is expected to increase by 1 percentage points to 51.4% (previously: 0.3 percentage points to 50.7%), which is mainly due to more favorable pricing, channel and regional combination, but the adverse effects of exchange rate fluctuation will offset the above advantages to a certain extent.

The rate is expected to grow by about 1 percentage points to around 10.8% (previously: 0.5 to 0.7 percentage points to 10.3% to 10.5%).

Excluding the negative effects of one-off tax in 2017, the basic earnings per share generated by continuous operation are expected to increase by 15% to 19% on the basis of 7.05 euros in the previous year without prior consideration of the reduction in the number of tradable shares due to the company's stock repurchase program (previously: 12% to 16%).