Adidas revenue up 9% in first nine months of 2018

From a brand perspective, revenues at Adidas increased 10 per cent, driven by double-digit growth in Sport Inspired as well as high-single-digit growth in Sport Performance, the latter driven by continued double-digit growth in training and running. Revenues at the Reebok brand decreased 5 per cent as double-digit growth in Classics was more than offset by declines in training and running. From a channel perspective, the company’s top line was largely driven by excellent double-digit growth in direct-to-consumer revenues with strong support from e-commerce, where revenues grew 76 per cent in the quarter.

From a market segment perspective, the top-line expansion in the third quarter was driven by ongoing strength in the company’s strategic growth regions: the combined sales of the Adidas and Reebok brands continued to expand at strong double-digit rates in both North America (+16 per cent) and Asia-Pacific (+15 per cent), the latter driven by Greater China (+26 per cent). Revenues in Russia/CIS increased 7 per cent as the positive impact from World Cup-related sales still offset the significant amount of store closures during the past twelve months. While revenues in Latin America were flat, sales in emerging markets decreased by 2 per cent. Revenues in Western Europe, in line with expectations, declined 1 per cent during the quarter.

“We delivered high-quality growth again in Q3. The top-line expansion was driven by double-digit increases across our strategic growth areas North America, Greater China and e-commerce. At the same time, we achieved strong profitability improvements despite a significant increase in marketing investments and severe currency headwinds. With these results, we are confident to reach a higher-than-expected profitability level in 2018 and remain firmly on track to achieve our long-term targets until 2020,” said CEO Kasper Rorsted, Adidas.

Due to the strong financial performance in the first nine months of 2018, Adidas has increased its profitability outlook for the year and specified the targeted range for its top-line growth. The company now projects currency-neutral revenues in 2018 to grow between 8–9 per cent, at the lower end of the communicated range (previously: around 10 per cent), due to lower-than-initially-expected growth in Western Europe. At the same time, Adidas now expects net income from continuing operations to reach between €1.660 to €1.720 billion, reflecting an increase of between 16–20 per cent compared to the prior-year level of €1.430 billion. The company’s gross margin is now projected to increase up to 1.0 percentage points to a level of up to 51.4 per cent. (PC)

Fibre2Fashion News Desk – India