During the fourth quarter of 2010, adidas Group revenues increased 9% on a currency-neutral basis. Currency-neutral revenues in the Wholesale and Retail segments increased 8% and 23%, respectively. Sales for Other Businesses decreased 3%. By brand, adidas and Reebok sales increased 10% and 15% currency-neutral, respectively. Currency-neutral revenues in Western Europe increased 3% due to growth in the Wholesale and Retail segments as well as Other Businesses.
Currency-neutral sales in European Emerging Markets rose 22%, driven by significant growth in the Retail segment. Group sales in North America grew 12% on a currency-neutral basis, driven by a 13% sales increase for adidas and a 24% sales increase for Reebok.
Currency-neutral sales in Greater China grew 11%, driven by increases in both the Wholesale and Retail segments. Currency-neutral sales in Other Asian Markets grew 7% as a result of increases in all major markets. In Latin America, sales were up 8% on a currency-neutral basis, driven by both Wholesale and Retail. Currency translation effects had a positive impact on sales in euro terms. Group revenues grew 19% to € 2.931 billion in the fourth quarter from € 2.458 billion in 2009.
The Group's gross margin increased 0.3 percentage points to 46.5% (2009: 46.2%) in the fourth quarter, mainly due to a larger share of higher-margin Retail sales and less clearance sales. Group gross profit increased 20% to € 1.362 billion (2009: € 1.136 billion). Other operating expenses as a percentage of sales increased 0.5 percentage points to 47.1% compared to the prior year (2009: 46.6%).
This was mainly due to higher sales and marketing working budget expenses. As a result of the higher other operating expenses as a percentage of sales, the Group's operating margin decreased 0.8 percentage points to 1.0%. Operating profit declined 33% to € 28 million compared to € 42 million in 2009. In the fourth quarter of 2010, the Group's net income attributable to shareholders decreased 64% to reach € 7 million (2009: € 19 million). Diluted earnings per share went down to € 0.03 (2009: € 0.09).
"Our fourth quarter performance rounds off an excellent year for the adidas Group," commented Herbert Hainer, adidas Group CEO. "Not only did we meet, but we beat all our initial expectations for the year. All our brands scored with consumers in an improving worldwide economy. We outgrew our major competitors, achieving record sales of € 12 billion. Along the way, we generated an outstanding operating cash flow of € 1.2 billion. Therefore, I am proud to report that our Group is in fantastic shape."
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