Shares of Adidas (ADDYY – Free Report) soared over 9% Thursday after the German sportswear company reported strong second-quarter results, boosted by e-commerce expansion and growth in North America and China. But rival Nike (NKE – Free Report) also thrived in its most recent quarter. So let’s take a look at which sportswear stock looks like the better buy at the moment.
Adidas
Adidas saw its quarterly revenues jumped 10% on a currency neutral basis—up 4% in euro terms—to 5.26 billion euros ($6.1 billion). The firm posted quarterly net profit of 396 million euros ($459.6 million), up from 158 million euros in the previous-year period. More importantly, North American sales jumped roughly 16% to 1.08 billion euros, while revenues in Greater China surged 27%.
Furthermore, Adidas brand revenues jumped 12%, boosted by growth in the firm’s training, running, and football (soccer) units. Investors should also note that the firm’s direct-to-consumer sales climbed at a double-digit rate, with e-commerce sales up 26%, outpacing Adidas’ single-digit wholesale expansion. “With these results, we remain firmly on track to achieve our set targets for the full year 2018 and long term until 2020,” Adidas CEO Kasper Rorsted said in a statement.
Clearly, Adidas had a strong quarter of growth in two of the largest markets in the world. Plus, the company’s direct-to-consumer sales will be a key part of its expansion going forward.
Nike
But let’s not forget that Adidas’ Oregon-based competitor posted strong fiscal Q4 results in late June. Nike’s quarterly revenues climbed by 13% to hit $9.79 billion. Nike also saw its North American sales pop 3% to hit $3.88 billion, after three straight quarters of declines.
Nike’s sales in Greater China skyrocketed 35% to $1.47 billion, with Jordan Brand up nearly 50%. Investors should note that Nike’s growth in Europe and China outpaced Adidas. Nike also said on its earnings call that Nike Direct drove over 90% of its growth for the year, with digital sales up 41% in Q4.
No Comments