Third quarter adidas Group currency-neutral sales grew 11% on a currency-neutral basis, driven by double-digit sales growth in the adidas and TaylorMade-adidas Golf segments. While adidas revenues increased 15%, TaylorMade-adidas Golf sales grew 12% on a currency-neutral basis. Revenues in the Reebok segment declined 1%. Currency movements negatively impacted Group sales in euro terms. Group revenues grew 5% in euro terms to 3.08 billion ($4.65 bn) in the third quarter of 2008 from 2.94 billion ($4.04 bn) in 2007.
Third quarter EPS increases 6%
The Groups gross margin increased 0.4 percentage points to 49.0% (2007: 48.6%) in the third quarter as a result of an improving regional mix, further own-retail expansion and favorable currency movements. These effects more than offset higher sourcing costs. Group gross profit increased 6% to 1.51 billion ($2.28 bn) from 1.43 billion ($1.96 bn) last year. The Groups operating margin decreased 0.7 percentage points to 15.3% in the third quarter of 2008 versus 16.0% in the prior year as a result of higher operating expenses as a percentage of sales. Operating profit, however, increased slightly to 473 million ($713 mm) versus 471 million ($647 mm) in 2007. The Groups net income attributable to shareholders grew 2% to 302 million ($455 mm) from 298 million ($410 mm) last year, supported by a lower tax rate. As a result of the lower weighted average number of shares due to the share buyback program, earnings per share increased at a stronger rate. Basic EPS for the third quarter grew 6% to 1.54 ($2.32).
“We have again delivered a strong set of financial results. Momentum in the adidas and TaylorMade-adidas Golf segments has clearly continued,” commented adidas Group CEO and Chairman Herbert Hainer. “And this is despite mounting pressure on retail markets and consumer spending around the globe.”
adidas backlogs grow 4% on a currency-neutral basis
Backlogs for the adidas brand at the end of the third quarter increased 4% versus the prior year on a currency-neutral basis. The non-recurrence of prior year orders for UEFA EURO 2008 related product had a negative impact on football backlogs. The overall improvement, however, was supported by increases in many other major categories. In euro terms, adidas backlogs also grew 4%. Footwear orders increased 6% in currency-neutral terms (+6% in euros) with growth coming from all regions. Apparel backlogs grew 1% on a currency-neutral basis (+1% in euros), driven by growth in Asia which more than compensated declines in Europe and North America.
Footwear | Apparel | Total[i] | ||||
| in | currency-neutral | in | currency-neutral | in | currency-neutral |
Europe | (1) | 1 | (4) | (2) | (2) | 0 |
North America | 10 | 11 | (4) | (3) | 3 | 5 |
Asia | 17 | 12 | 13 | 8 | 13 | 8 |
Total | 6 | 6 | 1 | 1 | 4 | 4 |
Year-over-year development of adidas order backlogs by product category and region as at
September 30, 2008 (in %)
Currency-neutral Reebok backlogs at the end of the third quarter of 2008 decreased 13% versus the prior year on a currency-neutral basis. In euro terms, this also represents a decline of 13%. Footwear backlogs decreased 10% in currency-neutral terms (10% in euros). Apparel backlogs declined by 23% on a currency-neutral basis (24% in euros). These developments largely reflect challenging market conditions in Reeboks major markets. Due to the exclusion of the own-retail business and the high share of at-once business in Reeboks sales mix, order backlogs in this segment are not indicative of the expected 2008 sales development.
Footwear | Apparel | Total[1] | ||||
| in | currency-neutral | in | currency-neutral | in | currency-neutral |
Europe | (12) | (10) | (24) | (23) | (16) | (14) |
North America | (23) | (22) | (23) | (22) | (22) | (21) |
Asia | (37) | (41) | (31) | (36) | (35) | (39) |
Total | ||||||
