April 29 (Reuters) - German sportswear company Adidas said on Wednesday it had better-than-expected operating profit in the first quarter, boosted by strong demand despite what Chief Executive Bjorn Gulden described as a "highly volatile and heavily discounted" retail environment, particularly in the sports footwear sector.

The sportswear manufacturer said net sales for the group rose 14 percent excluding the impact of currency fluctuations to 6.6 billion euros ($7.7 billion) this quarter, despite several Middle Eastern countries recording a decline in sales due to the ongoing conflict in the region.

Adidas said it follows a strict policy of not selling too many products to retailers, thus avoiding having to lower the prices of athletic shoes.

Rival US company Nike said earlier this month that it was pursuing a "bold" policy of cutting prices in an effort to clear unsold inventory.

Adidas' operating profit in the first three months of 2026 increased by 16 percent to 705 million euros, exceeding analysts' expectations of 647 million euros in a company-commissioned survey, and rising from 610 million euros in the previous year.

Adidas said sales benefited from increased demand for football equipment in the wake of the 2026 World Cup kicking off in June.

(US$1 = €0.8546)