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adidas posts higher-than-expected profits in Q1
May '12
adidas Group currency-neutral sales increase 14% in the first quarter of 2012. In the first quarter of 2012, Group revenues increased 14% on a currency-neutral basis as a result of double-digit sales increases in Wholesale, Retail and Other Businesses. Currency translation effects had a positive impact on sales in euro terms. Group revenues grew 17% to € 3.824 billion in the first quarter of 2012 from € 3.273 billion in 2011.

“We are off to a fast start in 2012 and there is still plenty to come as adidas takes centre-stage at the UEFA EURO 2012 and the London 2012 Olympics,” commented Herbert Hainer, adidas Group CEO. “We have worked hard to keep inventories at industry-low levels. With the backdrop of clean markets, you will see us push forward with a whole host of new innovative product and brand experiences that will continue to excite consumers and customers around the world.”

In the first quarter of 2012, currency-neutral Wholesale revenues increased 10% due to double-digit sales growth at adidas. Currency-neutral Retail sales increased 16% versus the prior year, driven by 9% comparable store sales growth. Revenues in Other Businesses were up 32% on a currency-neutral basis, driven by strong double-digit sales increases at TaylorMade-adidas Golf and Reebok-CCM Hockey.

Currency translation effects had a positive impact on segmental sales in euro terms. Wholesale revenues increased 13% to € 2.614 billion from € 2.320 billion in 2011. Retail sales rose 20% to € 693 million versus € 577 million in the prior year. Sales in Other Businesses grew 37% to € 517 million (2011: € 376 million).

In the first quarter of 2012, currency-neutral adidas Group sales grew in all regions. Revenues in Western Europe increased 7% on a currency-neutral basis, primarily as a result of sales growth in the UK, Italy, Poland, Spain and Germany. In European Emerging Markets, Group sales increased 15% 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 11% on a currency-neutral basis due to strong increases in the USA. Sales in Greater China increased 26% on a currency-neutral basis. Currency-neutral revenues in Other Asian Markets grew 26%, driven by strong double-digit increases in Japan and South Korea. In Latin America, sales grew 14% on a currency-neutral basis, with double-digit increases in most of the region's major markets. In most regions, currency translation effects had a positive impact on sales in euro terms.

The gross margin of the adidas Group decreased 0.7 percentage points to 47.7% in the first quarter of 2012 (2011: 48.5%). The increase in input costs more than offset the positive impact from a more favourable product and regional sales mix as well as a larger share of higher-margin Retail sales. Gross profit for the adidas Group grew 15% to € 1.826 billion versus € 1.587 billion in the prior year.

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