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adidas currency-neutral sales up at double-digit rate in Q3

09 Nov '10

3 min read

adidas Group, a global leader in the sporting goods industry announced nine months results for 2010.

• adidas and Reebok currency-neutral sales increase 10% and 14% respectively in Q3
• Group sales grow in all geographies in Q3, with North America and Greater China increasing 14% and 9% currency-neutral respectively
• Comparable Retail store sales increase 10% currency-neutral in Q3
• Nine months Group gross and operating margins increase 3.1 and 3.7 percentage points respectively

“I am pleased to report that the third quarter met our high expectations. All key brand initiatives continued to resonate with consumers around the world,” commented Herbert Hainer, adidas Group CEO. “Double-digit revenue growth in football, adidas Sport Style and Reebok year-to-date, as well as a resumption of growth in Greater China in the third quarter all reflect a well executed 2010 strategy.”

Herbert Hainer stated: "We have made an explosive comeback in 2010, and I fully expect us to round off the year on a high. Although the fourth quarter is a seasonally small one in terms of sales and profit, it is nonetheless an important period for seeding some of the initiatives that will inspire and excite consumers for our brands in the year ahead. While we will certainly face headwinds from higher input costs and currency volatility, with our powerful brands, extensive global presence and commitment to innovation, we are ready to face any challenges 2011 may bring our way. And I am already confident we have what it takes to deliver considerable top- and bottom-line improvements in the year ahead."

During the third quarter of 2010, Group revenues increased 10% on a currency-neutral basis. Currency-neutral revenues in the Wholesale and Retail segments increased 10% and 16%. Sales for Other Businesses increased 4%. Currency-neutral revenues in Western Europe increased 8% supported by strong growth in the football category. Currency-neutral sales in European Emerging Markets rose 16%, driven by growth in both the Wholesale and Retail segments.

Group sales in North America grew 14% on a currency-neutral basis, driven by a 15% sales increase for adidas and a 25% sales increase for Reebok. Currency-neutral sales in Greater China grew 9%, driven by increases in both the Wholesale and Retail segments. Currency-neutral sales in Other Asian Markets and in Latin America were both up 7% on a currency-neutral basis. By major brand, adidas and Reebok sales increased 10% and 14% currency-neutral respectively, while TaylorMade-adidas Golf sales were up 4% currency-neutral. Currency translation effects had a positive impact on sales in euro terms. Group revenues grew 20% to € 3.468 billion in the third quarter from € 2.888 billion in 2009.

Third quarter diluted EPS at € 1.27
The Group's gross margin increased 2.1 percentage points to 47.3% (2009: 45.3%) in the third quarter, mainly due to lower input costs, less clearance sales and a larger share of higher-margin Retail sales. Group gross profit increased 26% to € 1.641 billion (2009: € 1.307 billion). Other operating expenses as a percentage of sales increased 1.7 percentage points to 36.8% compared to the prior year (2009: 35.1%).

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