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Eyes on 2019 finish line as Adidas picks up pace

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Frankfurt am Main (AFP)

German sporting goods maker Adidas said Friday that sales online and in China had pumped up profits and revenues in the first quarter, confirming its outlook for double-digit profit growth over the full year.

Between January and March, net profit leaped 17 percent year-on-year to 632 million euros ($706 million), outstripping forecasts from analysts surveyed by Factset.

Operating, or underlying profits grew at the same pace, reaching 875 million euros, as revenues clambered six percent higher to 5.9 billion.

"Double-digit sales increases in our strategic growth areas Greater China and e-commerce" helped the group to the revenue boost, chief executive Kasper Rorsted said.

While China added 16 percent in currency-neutral sales, North America inched up three percent after the group highlighted supply chain bottlenecks earlier in the year.

And Europe and Latin America each shed three percent.

Sales at the group's flagship Adidas brand brought all the positive news, adding five percent, as subsidiary Reebok continued to struggle with a six-percent contraction.

Lower costs for raw materials, favourable exchange rates and a better mix of sales also helped boost the firm's operating margin by 2.5 percentage points, to 53.6 percent.

Looking ahead, "we confirm our full-year outlook and remain confident" of increasing sales still faster in the second half, CEO Rorsted said.

Adidas expects sales to grow between five and eight percent in currency-neutral terms in 2019, with net profits up between 10 and 14 percent at 1.9 to 1.95 billion euros.

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