Adidas AG reported a 14 percent rise in third quarter earnings but lowered its full year revenue forecast due to declines of its Reebok brand and the National Hockey League lockout in North America. It had previously forecast a full year rise of around 10 percent but now expects revenues to increase high single digits.

Adidas Group currency-neutral sales grow 4 percent in the third quarter of 2012

In
the third quarter of 2012, Group revenues grew 4 percent on a
currency-neutral basis, driven by double-digit sales increases in
Retail. Currency-neutral revenues in Western Europe increased 1 percent,
supported by sustained momentum at Adidas. In European Emerging
Markets, currency-neutral sales grew 19 percent as a result of strong
increases at both Adidas and Reebok. Group sales in North America were
down 5 percent on a currency-neutral basis, as double-digit increases at
Adidas and TaylorMade-Adidas Golf were more than offset by strong
revenue declines at Reebok. In Greater China, Group sales were up 11
percent on a currency-neutral basis, driven by double-digit increases at
Adidas as well as growth at Reebok. Currency-neutral revenues in Other
Asian Markets increased 1 percent as growth at Adidas was partly offset
by a strong sales decline at Reebok. In Latin America, currency-neutral
sales grew 16 percent, driven by double-digit growth at Adidas,
TaylorMade-Adidas Golf and Rockport. From a brand perspective, third
quarter sales at Adidas increased 10 percent currency-neutral. Sales in
the TaylorMade-Adidas Golf segment grew 4 percent on a currency-neutral
basis. Reebok sales declined 25 percent on a currency-neutral basis,
largely as a result of the non-recurrence of prior-year licence sales as
well as negative impacts from Reebok India Company. Currency
translation effects had a positive impact on sales in euro terms. Group
revenues grew 11 percent to €4.173 billion in the third quarter of 2012
from €3.744 billion in 2011.
 
Third quarter gross margin increases 0.3 percentage points

The
Group’s gross margin increased 0.3 percentage points to 47.4 percent
(2011: 47.1 percent) in the third quarter as product price increases, a
more favourable product and regional sales mix as well as a larger share
of higher-margin Retail sales more than offset the increase in input
costs. Group gross profit increased 12 percent to €1.978 billion (2011:
€1.762 billion). Other operating expenses as a percentage of sales grew
0.7 percentage points to 37.0 percent compared to 36.3 percent in the
prior year, mainly as a result of an increase in the Group’s marketing
expenditure to support this year’s major sporting events. As a result of
the higher gross margin and other operating income, which more than
offset the increase in other operating expenses as a percentage of
sales, the Group’s operating margin grew 0.1pp to 11.8 percent.
Operating profit increased 12 percent to €494 million compared to €441
million in 2011. The Group’s net income attributable to shareholders
grew 14 percent to €344 million (2011: €303 million). Diluted earnings
per share for the third quarter increased 14 percent to €1.64 (2011:
€1.45).
 
“These impressive financial results reflect our
relentless focus on creating the industry’s most desirable brands, which
we are doing through consistent product innovation, brand
authentication and investment,” commented Herbert Hainer, Adidas Group
CEO. “We have grown the bottom line faster than the top line now for the
last seven quarters, which ensures we will deliver another year of
record financial results for 2012.“
 
Adidas Group currency-neutral sales up 8 percent in the first nine months of 2012

In
the first nine months of 2012, Group revenues increased 8 percent on a
currency-neutral basis. Currency translation effects had a positive
impact on sales in euro terms. Group revenues grew 14 percent to €11.514
billion in the first nine months of 2012 from €10.081 billion in 2011.
 
First nine months Group sales increase driven by double-digit growth in Retail and Other Businesses

The
Adidas Group’s sales increase in the first nine months of 2012 was
primarily due to double-digit growth in Retail as well as in Other
Businesses. Currency-neutral Wholesale revenues increased 4 percent
during the period, driven by double-digit sales growth at Adidas.
Currency-neutral Retail sales increased 16 percent versus the prior year
as a result of double-digit sales growth at Adidas and Reebok.
Comparable store sales grew 9 percent on a currency-neutral basis.
Revenues in Other Businesses increased 20 percent on a currency-neutral
basis, mainly due to strong double-digit sales growth at
TaylorMade-Adidas Golf and Reebok-CCM Hockey. Currency translation
effects had a positive impact on segmental sales in euro terms.


 

Nine months
2012

Nine months
2011

Change y-o-y in euro terms

Change y-o-y currency-neutral


 

€ in millions

€ in millions

in %

in %

Wholesale

7,470

6,869

9

4

Retail

2,491

2,015

24

16

Other Businesses

1,553

1,197

30

20


Total1)

11,514

10,081

14

8

Nine months net sales development by segment

1) Rounding differences may arise in totals.

Currency-neutral sales increase in all regions

In the first nine months of 2012, currency-neutral Adidas Group sales grew in all regions. Revenues in Western Europe increased 4 percent on a currency-neutral basis, primarily as a result of double-digit sales growth in the UK and Poland. In European Emerging Markets, Group sales increased 17 percent on a currency-neutral basis due to double-digit growth in most of the region’s markets. Sales for the Adidas Group in North America grew 5 percent on a currency-neutral basis due to increases in both the USA as well as Canada. Sales in Greater China increased 16 percent on a currency-neutral basis. Currency-neutral revenues in Other Asian Markets grew 9 percent, driven by double-digit increases in Japan and South Korea. In Latin America, sales grew 10 percent on a currency-neutral basis, with strong double-digit increases in Argentina and Colombia. Currency translation effects had a positive impact on sales in euro terms

 



Nine months 2012



Nine months
2011



Change y-o-y in euro terms



Change y-o-y currency-neutral

 



€ in millions

€ in millions

in %

in %

Western Europe



3,342

3,172

5

4

European Emerging Markets



1,486

1,189

25

17

North America



2,641

2,306

15