U.S. Markets open in 5 hrs 46 mins

Factors Setting the Tone for Adidas' (ADDYY) Q1 Earnings

Zacks Equity Research

Adidas AG ADDYY is slated to release first-quarter 2019 results on May 3.

The company has an impressive earnings surprise trend, having surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average being 9.3%.

The Zacks Consensus Estimate for first-quarter earnings is pegged at $1.60, which remained unchanged in the past 30 days. For quarterly revenues, the consensus mark stands at $6.5 billion, implying 4.5% decline from the prior-year quarter tally.
 

Adidas AG Price and EPS Surprise

Adidas AG Price and EPS Surprise | Adidas AG Quote

Let’s see how things are shaping up prior to this announcement.

Factors at Play

Strength in the Adidas brand, particularly in North America, is driving the company’s quarterly performance. In addition, the brand’s China and e-commerce divisions are  performing quite well. Revenues at this brand improved 5% in fourth-quarter 2018 owing to robust growth in Sport Inspired and high-single-digit improvement in Sport Performance.

Moreover, the company has been gaining from solid e-commerce growth and a double-digit increase in direct-to-consumer revenues, which are significantly contributing to its top line. All these growth drivers along with Adidas’ constant product launches and strong marketing initiatives make us hopeful about the company’s prospects.

However, unfavorable currency rates as well as higher costs might weigh on Adidas’ top- and bottom-line performance in the to-be-reported quarter.

What the Zacks Model Unveils

Our proven model does not conclusively show that Adidas is likely to beat earnings estimates in first-quarter 2019. This is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Adidas has a Zacks Rank #3 but its Earnings ESP of 0.00% makes surprise prediction difficult.

Stocks With Favorable Combination

Here are some other companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:

lululemon athletica inc. LULU has an Earnings ESP of +0.51 and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Hanesbrands Inc. HBI has an Earnings ESP of +3.18% and a Zacks Rank #3.

Ross Stores, Inc. ROST has an Earnings ESP of +2.20% and a Zacks Rank #3.

Is Your Investment Advisor Fumbling Your Financial Future?

See how you can more effectively safeguard your retirement with a new Special Report, “4 Warning Signs Your Investment Advisor Might Be Sabotaging Your Financial Future.”

Click to get it free >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
lululemon athletica inc. (LULU) : Free Stock Analysis Report
 
Ross Stores, Inc. (ROST) : Free Stock Analysis Report
 
Adidas AG (ADDYY) : Free Stock Analysis Report
 
Hanesbrands Inc. (HBI) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.