TalylorMade-adidas Golf sales increased 30.7% for the second quarter to 264 million ($332 mm), compared to 202 million ($255 mm) in the 2005 second quarter. In U.S. Dollar terms, TM-aG sales grew 30.3%. TM-aG currency-neutral sales increased 28% in the first half, driven by double-digit growth in “nearly all major categories” and the transfer of the Greg Norman Collection from under the Reebok business.
In Europe, TM-aG sales rose 3.5% in U.S. dollar terms to roughly $34 million (27 mm) from $33 million (26 mm) in the year-ago period. Sales in the North America region jumped 41% for the period to $220 million from $156 million in Q2 last year, and saw a 20% increase when measured in Euros. Asia/Pacific sales increased 19% in U.S. dollar terms to $77 million from $64 million in the year-ago period.
Gross margins for TM-aG in the second quarter were down 440 basis points to 45.0% of sales due primarily to lower margins in the metalwoods category resulting from promotional activity during June.
Operating profit for the quarter was up roughly 10% to $42 million (33 mm) from $38 million (30 mm) in Q2 last year, but operating margins suffered for the quarter and the half.
The company expects to see TM-aG sales increase in the double-digits for the year on a currency-neutral basis, due in part to the inclusion of GNC, but management is also increasing full year estimates to double-digit currency-neutral growth excluding the GNC business.
