Adidas reported net profit increased 6 percent as a more favorable pricing, product and regional sales mix as well as a larger share of higher-margin retail sales boosted the margin. Revenue decreased 2 percent to EUR3.75 billion due to negative currency effects
Adidas Group First Quarter 2013 Results
- Group sales stable on a currency-neutral basis
- Gross margin grows 2.4 percentage points to record level of 50.1 percent
- Net income attributable to shareholders up 6 percent to €308 million ($400.4 mm)
- Adidas Group confirms full year guidance
- TaylorMade-Adidas Golf sales increase 13 percent currency-neutral
- Group operating margin up 1.1 percentage points
- Net borrowings down 72 percent to €180 million ($234 mm) at quarter-end
- Inventories decrease 2 percent on currency-neutral basis
Adidas Group currency-neutral sales remain stable in the first quarter of 2013
In the first quarter of 2013, Group revenues were stable on a currency-neutral basis as a result of sales increases in Retail and Other Businesses. Currency translation effects had a negative impact on sales in euro terms. Group revenues decreased 2 percent to €3.751 billion ($4.9 bn) in the first quarter of 2013 from €3.824 billion in 2012.
Group sales supported by growth in Retail and Other Businesses
In the first quarter of 2013, currency-neutral Wholesale revenues decreased 3 percent due to double-digit sales declines at Reebok. Currency-neutral Retail sales increased 6 percent versus the prior year, driven by sales growth at both Adidas and Reebok. Revenues in Other Businesses were up 9 percent on a currency-neutral basis, driven by double-digit sales increases at TaylorMade-Adidas Golf.
Currency translation effects had a negative impact on segmental sales in euro terms. Wholesale revenues decreased 5 percent to €2.481 billion ($3.2 bn) in the first quarter of 2013 from €2.614 billion in 2012. Retail sales grew 4 percent to €722 million ($938.6 mm) versus €693 million in the prior year. Sales in Other Businesses rose 6 percent to €548 million ($712.4 mm) (2012: €517 million).
Our Group has delivered a solid performance in the first quarter of 2013, commented Herbert Hainer, Adidas Group CEO. We delivered stable revenues, despite running against high prior year comparisons due to the sell-in of event-related products for the London Olympics and the European Football Championships as well as facing a continuation of macroeconomic challenges in Europe. And, we delivered strong margin progress which is our top priority for the year. Our relentless focus on quality sales growth resulted in our highest-ever quarterly gross margin, above 50 percent for only the second time in our history.
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First quarter net sales development by segment
1) Rounding differences may arise in totals.
Currency-neutral sales increase in most regions
In the first quarter of 2013, currency-neutral Adidas Group sales grew in all regions except Western Europe and Other Asian Markets. Revenues in Western Europe decreased 6 percent on a currency-neutral basis, as growth in France and Poland was more than offset by sales declines in Spain, Italy and the UK. In European Emerging Markets, Group sales increased 3 percent on a currency-neutral basis due to sales growth in the Middle East, South Africa and Russia/CIS. Sales for the Adidas Group in North America grew 3 percent on a currency-neutral basis, driven by 5 percent growth at Adidas and 19 percent growth at TaylorMade-Adidas Golf. Sales in Greater China increased 6 percent on a currency-neutral basis. Currency-neutral revenues in Other Asian Markets declined 4 percent, as double-digit increases in South Korea were more than offset by sales declines in Japan. In Latin America, sales grew 12 percent on a currency-neutral basis, with double-digit increases in most of the regions major markets. Currency translation effects had a mixed impact on regional sales in euro terms.
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