Executive Summary

• Adidas grew 3Q18 revenues by 8% at constant currency but the missed consensus estimate. Earnings before interest and taxes (EBIT) and earnings per share (EPS) came in ahead of consensus.
• Gross margin improvement of 140 basis points (bps) was driven by improved pricing and channel and category mix.
• Management lowered FY18 guidance for sales growth to 8%–9% from the previous target of 10% at constant currency. It raised guidance for net income growth to 16%–20% from the 13%–17% range it stated previously.