Executive Summary

• Adidas reported 1Q17 net sales of €5,671 million, up 18.9% on a reported basis and up 16.0% on a constant-currency basis. Net sales for the quarter were above the consensus estimate of €5,387 million. Revenue growth was underpinned by strong performance in North America and Greater China.
• The company’s gross margin contracted by 20 basis points year over year, to 49.2%, due to foreign-exchange headwinds. Underlying EPS of €2.23 represented an expansion of 5% year over year and beat the consensus estimate.
• For FY17, Adidas confirmed its guidance for group sales to increase by 11.0%–13.0% at constant currency. The company expects a full-year gross margin of 49.1% and an operating margin of 8.3%–8.5%. The company expects net income to grow by 18.0%–20.0% year over year, to approximately €1.225 billion.