Adidas (DB: ADS) 4Q18 Results: Supply Chain Shortages Reduce Near-Term Sales Outlook

Executive Summary

• In 4Q18, Adidas net sales increased 3.5% to €5.2 billion, or 5% on a currency-neutral basis, driven by double-digit gains in Asia Pacific and Greater China.
• The operating margin contracted 10 bps, reflecting modest gross margin expansion offset by higher marketing and overhead expenditures.
• For 2019, the company expects net sales to grow 5-8% on a currency neutral basis, and operating margins to expand 50-70 bps. Net income is projected to grow 10-14% to €1.88-1.95 billion.