adidas Group Nine Months 2014 Results

adidas Group Nine Months 2014 Results

adidas Group Nine Months 2014 Results

The FINANCIAL -- During the third quarter of 2014, the adidas Group continued to deliver robust top-line results, according to adidas Group.

Group revenues increased 9% on a currency-neutral basis, driven by a double-digit sales increase in Retail and a high-single-digit revenue growth in Wholesale. All regions, except North America, contributed to the currency-neutral revenue growth. Western Europe increased 10%, mainly as a result of strong sales increases in Germany, France, Spain and the UK. In European Emerging Markets, currency-neutral revenues were up 19%, driven by double-digit growth in Russia/CIS. Group sales in North America decreased 1% on a currency-neutral basis, as mid-single-digit sales growth at adidas was more than offset by declines at TaylorMade-adidas Golf and Reebok. In Greater China, Group sales were up 13% on a currency-neutral basis, due to continued momentum across all channels. Currency-neutral revenues in Other Asian Markets grew 6% driven by double-digit sales increases in South Korea and India. In Latin America, currency-neutral sales grew 16%, with double-digit increases in most markets, in particular Argentina, Brazil and Mexico.

From a brand perspective, the strong top-line momentum at both adidas and Reebok continued during the quarter. Third quarter sales at adidas increased 12% on a currency-neutral basis, driven by double-digit sales growth in the Sport Performance football and running categories, as well as at adidas Originals & Sport Style. Sales at Reebok grew 7% on a currency-neutral basis, driven by sales momentum in the fitness training, walking and fitness running categories. Revenues in the TaylorMade-adidas Golf segment declined 36% on a currency-neutral basis, as a result of the continued weakness in the golf market as well as TaylorMade-adidas Golf’s ongoing efforts to clean retail inventories and the timing of new product introductions compared to the prior year period. Revenues at Reebok-CCM Hockey increased 15% on a currency-neutral basis mainly due to growth in key categories such as skates and protective equipment as well as in hockey apparel. Rockport sales increased 5% currency-neutral. Currency translation effects had a negative impact on sales in euro terms. Group revenues increased 6% to € 4.118 billion in the third quarter of 2014 from € 3.879 billion in 2013, according to adidas Group.

Third quarter gross margin declines 1.9 percentage points

The Group’s gross margin decreased 1.9 percentage points to 47.4% (2013: 49.3%) in the third quarter, mainly due to higher input costs as well as negative currency effects. In addition, increased clearance activities, in particular in Russia/CIS, contributed to the gross margin decline. Group gross profit increased 2% to € 1.952 billion (2013: € 1.913 billion). Other operating expenses as a percentage of sales decreased 0.9 percentage points to 38.7% compared to 39.6% the prior year. In euro terms, other operating expenses increased 4% to
€ 1.594 billion, mainly as a result of higher marketing working budget expenditure. In addition, higher expenditure related to the expansion of the Group’s own-retail activities contributed to the increase in other operating expenses. The Group’s operating profit declined 13% to € 405 million (2013: € 463 million) in the third quarter. The operating margin decreased 2.1 percentage points to 9.8% from 11.9% in 2013. Basic and diluted earnings per share for the third quarter decreased 11% to € 1.35 (2013: € 1.51).

adidas Group currency-neutral sales increase 6% in the first nine months of 2014

In the first nine months of 2014, Group revenues increased 6% on a currency-neutral basis, driven by sales increases in Wholesale and Retail. Currency translation effects had a negative impact on sales in euro terms. Group revenues grew 1% to € 11.116 billion in the first nine months of 2014 from € 11.013 billion in 2013, according to adidas Group.

Nine months Group sales increase driven by growth in Wholesale and Retail

In the first nine months of 2014, currency-neutral Wholesale revenues increased 6%, due to sales growth at both adidas and Reebok. Currency-neutral Retail sales were up 21% versus the prior year as a result of double-digit sales increases at adidas and Reebok. Revenues in Other Businesses were down 17% on a currency-neutral basis, due to double-digit sales declines at TaylorMade-adidas Golf. Currency translation effects had a negative impact on segmental sales in euro terms.

By brand, revenues at adidas grew 11% on a currency-neutral basis, driven by double-digit sales growth in the Sport Performance football and running categories, as well as at adidas NEO. Sales at Reebok grew 6% on a currency-neutral basis, driven by double-digit increases in the fitness training, walking and studio categories as well as at Classics. Revenues in the TaylorMade-adidas Golf segment declined 29% on a currency-neutral basis, according to adidas Group.