Higher input prices, economic challenges hit adidas Q1 results

06 May '09

5 min read

In the first quarter of 2009, Group revenues decreased 6% on a currency-neutral basis, as a result of lower sales in all business segments. Currency translation effects positively impacted sales in euro terms. Group revenues in euro terms declined 2% to € 2.577 billion in the first quarter of 2009 from € 2.621 billion in 2008.

"We've faced a number of economic and market challenges in the first quarter of 2009," commented Herbert Hainer, adidas Group CEO and Chairman. "Our results have been materially affected by higher input prices, currency devaluation effects and restructuring costs. Although some of these items will recur again as we go through the balance of the year, I am convinced we will put most of these effects behind us in the current year."

adidas Group currency-neutral sales decline in all segments
Currency-neutral adidas segment revenues decreased 6% in the first quarter of 2009, driven in particular by a decrease in the football category resulting from the non-recurrence of strong prior year sales related to the UEFA EURO 2008. Currency-neutral sales in the Reebok segment declined 4% versus the prior year.

Double-digit growth in the women's category was more than offset by declines in most other categories. At TaylorMade-adidas Golf, currency-neutral revenues decreased 6% due to declines in all major categories. However, this development was partly offset by the consolidation of Ashworth revenues.

Currency translation effects positively impacted sales in all segments in euro terms. adidas sales in euro terms decreased 3% to € 1.917 billion in the first quarter of 2009 from € 1.968 billion in 2008. Revenues at Reebok grew 1% to € 458 million versus € 454 million in the prior year. TaylorMade-adidas Golf sales increased 2% to € 194 million in the first quarter of 2009 from € 191 million in 2008.

First quarter net sales growth by segment

adidas Group currency-neutral sales decrease in nearly all regions
Currency-neutral adidas Group sales declined in all regions except Latin America in the first quarter of 2009. Group sales in Europe decreased 5% on a currency-neutral basis, due to declines in most major countries impacted by the non-recurrence of prior year sales related to the UEFA EURO 2008. In North America, Group sales declined 17% on a currency-neutral basis due to lower consumer demand and retailer destocking in the USA. Sales for the adidas Group in Asia decreased 6% on a currency-neutral basis, as a result of declines in Japan and China. In Latin America, sales grew 31% on a currency-neutral basis, with double-digit increases coming from most of the region's major markets, supported by the new Reebok companies in Brazil/Paraguay and Argentina.

In euro terms, sales in Europe decreased 6% to € 1.175 billion in the first quarter of 2009 from € 1.249 billion in 2008. Sales in North America declined 7% to € 538 million from € 578 million in 2008. Revenues in Asia grew 6% to € 628 million in the first quarter of 2009 from € 594 million in 2008. Sales in Latin America grew 23% to € 218 million from € 177 million in the prior year.

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