Adidas, one of the largest manufacturers of sports apparel in the world beat rivals Nike and Under Armour on their home turf in North America as the company reported another consecutive quarter of double-digit sales growth for the region.
There was a 21 per cent growth in the sales of the company in the region for the first quarter of the current year compared to the same period a year earlier, said Adidas and added that a concerted focus on marketing and making use of celebrity partnerships such as the one with Pharrell Williams was behind this growth. There has been a steep drop in sales for both rivals Nike and Under Armour in the North American market.
The brand known for selling the Stan Smith sneakers said that the brand has been helped by a shift in the taste of consumers towards casual street wear.
Adidas has managed to substantially gain from the shift in trend among consumers. Last quarter was the ninth consecutive quarter when their sales has grown by 20 per cent or more in North America.
The way the company has performed on the overall in recent years has been commensurate with expectations, said CEO Kasper Rorsted. North America, China and e-commerce would continue to be the focus of the company in the near future, he said.
Compared to the same period of the previous year, there was an increase of 17 per cent in global income and a 10 per cent growth in global sales. The stocks of the company fell by 1 per cent as the results fell short of some expectations despite the analysts being impressed with the wider profit margins.
In North America, Adidas is still much smaller than Nike.
Compared to €4.3 billion ($5.1 billion) in annual sale for Adidas for the financial year of 2017 in North America, Nike clocked in with sales of $15.2 billion in the same period for the same region.
However, the German company has gained significant momentum. In the three months ended February, there was a drop of 6 per cent in the sales for Nike from its operations in North America. And the first quarter revenue was down 1 per cent for Under Armour fopr its North American business, the company reported on Tuesday.
However, there are also problems for Adidas.
There has bene intense criticism and scrutiny by the comment of Kanye West who is one of Adidas’ celebrity brand ambassadors, this week that suggested that slavery in the UNBited States has been a choice.
West is important for the company’s brand, Rorsted said in a television interview on Thursday without commenting on the controversial comments made by the rapper. The CEO said Adidas was not considering dropping West as a partner.
(Adapted from Money.CNN.com)