Adidas Wins In Chinese Market, Hits 16 Percent Q1 Growth

Adidas shoes
Adidas soccer shoes are displayed at soccer shop KAMO in Tokyo, Japan May 17, 2018. (Photo: REUTERS/Kim Kyung-Hoon/File Photo)

Adidas recorded solid growth figures during the first quarter of 2019, the German sportswear leader announced. Total turnover was recorded at $6.6 billion, accounting for a 16 percent turnover increase just in Q1 as its China business retains stability.

According to Xinhua, CEO of Adidas Kaspar Rorsted expressed optimism over the improvement in sales and other areas of the firm's China business. "We had a successful start to the year, delivering double-digit sales increases in our strategic growth areas Greater China and the e-commerce as well as another strong profitability improvement," Rorsted revealed.

Rorsted noted that the company is confident of further developments by the second half of 2019. He added that this year will mark a significant milestone in the international brand's 2020 goals.

Stock market investors quickly reacted positively to the news. Adidas shares soared by over 6.5 percent on Friday. The company's 240 euros per share is currently the highest in German stock index DAX and industry experts are optimistic about the sportswear firm's targets for succeeding quarters.

Adidas said in its quarterly report that the sales boost was driven particularly by its Sport Inspired and Sport Performance segments as more Chinese consumers transition to healthier lifestyles and gym activities.

In an interview with CNBC, Rorsted reiterated that Adidas remains one of the hottest sportswear brands in China. He added that the company is not affected by the global market slowdown that already impacted other brands.

Rorsted went on to explain that lower sourcing costs in China helped boost sales and retain stable growth. Strategic e-commerce planning also helped drive the company's sales goals. Net profit rounded up to $632 million, beating expectations of $567 million.

Industry analysts noted that another driving factor of Adidas' growth not just in China but also in other countries is the successful deal inked with world-famous performer and artist, Beyoncé.

Multiple outlets confirmed on Friday that Adidas had signed the influential artist. Rorsted has expressed excitement over the addition of Queen Bey into what the company chief referred to as his "dream team."

Meanwhile, Adidas' Q1 2019 report also revealed that the company experienced a decline in the eurozone. Supply chain problems in its North America plants also added to the dilemma in western markets.

Despite the European slowdown, Adidas is expecting a rebound in its western sales growth by the fourth quarter. Rorsted said investors should start being comfortable in "high single-digit growth rates" as the company seeks to beat targets in the coming months.

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