• by Sarah Mahoney  @mahoney_sarah, May 4, 2018

Adidas is continuing its string of all-star performances, reporting a 10% jump in first-quarter revenues, with especially good results in North America, China and in e-commerce. It continues to beat many of its competitors, but a new report indicates its sales are likely to decelerate amid increasing threats. 

And while it’s too soon to say whether the furor caused by spokesperson Kanye West’s controversial comment about slavery being a choice will have an impact on sales, Adidas says it is standing by him. CEO Kasper Rorsted told Bloomberg that while Adidas doesn’t support West’s views, he calls West “a very important part of our strategy” and a “fantastic creator.”

West’s Yeezy brand has been one Adidas’ most buzz-building–and certainly stokes the fire of its “Here to Create” positioning. Yet Adidas doesn’t break out those sales numbers, and some observers feel that given Adidas global reach, the partnership with West, which started in 2015, may not be that significant.

“West has had a minimal impact on Adidas sales,” says NPD sports analyst Matt Powell, who tells Marketing Daily that West is reported to have brought Adidas “as much negative press as positive.”

Reactions to the rapper’s slavery comments so far, as well as to a series of pro-Trump and anti-Obama tweets, include 105.1 The Bounce, a Detroit radio station, ditching West’s music, in response to a #muteKanye effort. And there’s been plenty of Twitter pushback, much of it using the #Ifslaverywasachoice hashtag.

Net income for the German-based Adidas rose 17%, and the company says it is on target to meet its annual projections. 

Those results are particularly striking, given major stumbles from competitors, with U.S. consumers 

turning up their noses at offerings from Nike and Under Armour. Last year, Adidas knocked off Nike’s Brand Jordan to become the No. 2 brand in U.S. footwear.

But a new report sees Adidas’ sales slowing. “The North American market remains highly promotional and competitive, and there are additional indications of deeper promotions on Adidas products,” writes Christopher Svezia, an analyst who follows the sector for Wedbush Securities.

He says Adidas is also under increasing threat from Nike, with its North American comeback strategy underway, as well as Champion, which is borrowing a page from Adidas, gaining fashion credibility among the streetwear crowd. And Puma, fueled by its connections with Rihanna and Selena Gomez, is “driving considerable brand heat of late,” he says.

New Balance, now working with actress Emma Roberts, also is well positioned to gain share, as are the Ellesse apparel brand, Asics, Fila and Lacoste.

He writes that Reebok, which Adidas says saw revenues fall 3% in the quarter, is “poised to return to growth in North America in the second half,” thanks to its collaborations with luminaries like Ariana Grande, Gal Gadot, Victoria Beckham and Shaquille O’Neil.