Adidas (ADSGn.DE) raised its 2018 profit forecast on Wednesday after selling more of its top-end sports shoes, although the German sportswear and fashion firm cut its revenue target due to a fall in sales in western Europe.
Chief Executive Kasper Rorsted has focussed on improving profitability at Adidas, which long lagged bigger rival Nike (NKE.N), since he took over in 2016, in part by simplifying product ranges and pushing ecommerce, where margins are higher.
Shares in Adidas, which have gained 12 percent in the last year, were indicated up 1.9 percent after it said it expects its net income from continuing operations to grow 16 to 20 percent to between 1.66 billion to 1.72 billion euros ($1.90-1.97 billion), compared with previous guidance of 13 to 17 percent.
But it cut its 2018 target for currency-neutral sales growth to between 8 to 9 percent from “around 10 percent”.
While Adidas has been taking market share from Nike in North America, the U.S. firm has been powering ahead in Europe, Middle East and Africa, helped by a big push in soccer.
German rival Puma (PUMG.DE) raised its outlook for full-year sales and operating profit last month as it reported strong sales growth in the Americas and Asia and said its first basketball shoe in 20 years had been well received.
Adidas had already warned that sales in western Europe were likely to stay flat in the second half after it failed to focus enough on launching more products.
On Wednesday, Adidas said currency-adjusted sales in the region fell 1 percent in the third quarter, while they rose 16 percent in North America and 15 percent in Asia-Pacific. Ecommerce sales jumped 76 percent in the three-month period.
Third-quarter sales rose by a currency-adjusted 8 percent to 5.873 billion euros, shy of analysts’ forecast of 5.92 billion euros, while net profit from continuing operations jumped 19 percent to 656 million euros, beating consensus.
($1 = 0.8731 euros)