Adidas reported better-than-expected first-quarter earnings on Wednesday, driven by strong early demand for football merchandise ahead of the FIFA World Cup in June, even as geopolitical tensions weighed on parts of its business.
The German sportswear giant posted a 14% rise in currency-neutral sales to 6.6 billion euros, while operating profit climbed 16% to 705 million euros, comfortably ahead of the 647 million euros forecast by analysts in a company-compiled poll, according to Reuters.
At 1:33 pm GMT+2 on April 29, Adidas shares were trading at 147.55 euros, up 7.08% on the day, reflecting investor optimism after the strong quarterly performance.
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Chief Financial Officer Harm Ohlmeyer said the company's strategy to frontload World Cup inventory helped avoid supply disruptions. "It was definitely the right decision to bring in the inventory early, especially for the World Cup," he said on a call to Reuters. "Without that, we would not have been able to grow 14% in the first quarter."
Football gear sales surged ahead of the global tournament, while running products also saw double-digit growth. The brand received an additional boost after Kenyan athlete Sabastian Sawe clocked a sub-two-hour marathon at the London Marathon using Adidas racing shoes.
However, the company flagged headwinds in the Middle East, where sales declined amid the Iran war. CEO Bjorn Gulden said store operations were frequently disrupted. "If you have bomb alarms in a market, that means that the authorities tell you not to open your stores," he noted, adding conditions were changing "from day to day".
Adidas emphasised pricing discipline in a "very volatile" retail environment to avoid heavy discounting, particularly in Europe where consumer demand remains uncertain. This contrasts with US rival Nike, which recently said it is being "aggressive" with promotions to clear excess inventory.
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