The U.S. is the "spiritual home of the global sporting goods boom," according to Stephen Wilmot of the WALL STREET JOURNAL. But the "fitter" of the two sportswear giants feeding those consumers is European. Adidas grew sales by 10% year-over-year in the quarter through June, according to to results published Thursday. That included 16% growth in North America and 27% growth in China. Nike's recent return to growth in the U.S. does not "seem to be tripping up its German rival." Of the major markets, only Western Europe was "flat" after some new products did not "hit the mark." Investors were "worried" that adidas "needed a breather" after constant-currency growth of 18% in '16 and 17% in '17, which was "partly driven by a craze for its Stan Smith sneakers." But the slowdown has not been "as dramatic as some feared." The stock leaped almost 9% in morning trading. Arguably "even better news" was that adidas is not resorting to discounts to "keep its top-line growth pumping." Despite the dollar’s strength, which pushes up sourcing costs, the company’s gross margin -- the amount it keeps after paying suppliers for the raw goods -- rose to 52.3%, from 50.1% a year before. The "key" to such margin gains is "selling shoes at full price." This should continue, given the company's tight inventory position (WSJ, 8/9).
