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The company’s gross margin increased 0.3 per cent to 52.1 per cent (2018: 51.8 per cent).
This improvement reflects high-single-digit growth in Sport Performance, driven by increases in the training, running and outdoor categories. In addition, revenues in Sport Inspired grew at a mid-single-digit rate. Currency-neutral Reebok sales were up 2 per cent, driven by growth in Sport. The company’s top-line increase was driven by all channels, reflecting acceleration in wholesale revenues and continued double-digit growth in the company’s direct-to-consumer business. The latter was supported by 14 per cent growth in ecommerce, on top of 76 per cent growth in the prior year period.
From a market segment perspective, the top-line expansion in the third quarter was driven by sales increase in all market segments. The combined currency-neutral sales of the Adidas and Reebok brands expanded at double-digit rates in Emerging Markets (+14 per cent), Russia/CIS (+13 per cent) and North America (+10 per cent). Revenues in Asia-Pacific increased 8 per cent, driven by double-digit growth in Greater China (+11 per cent), while sales in Latin America were up 5 per cent. Revenues in Europe returned to growth in the third quarter (+3 per cent).
“I am very pleased with our third quarter results and the continued progress made in our strategic growth areas, delivering double-digit sales increases at Adidas North America as well as in Greater China and e-commerce,” said Adidas CEO Kasper Rorsted. “We confirm our full-year outlook and remain confident about significant top-line acceleration during the fourth quarter. 2019 will be a record year, despite some challenges, and another important milestone toward achieving our 2020 targets.”
For 2019, the company continues to expect sales to increase at a rate of between 5-8 per cent on a currency-neutral basis with significant sequential top-line acceleration during the fourth quarter. The company’s gross margin is forecast to increase to a level of around 52 per cent in 2019 (2018: 51.8 per cent). The operating margin is expected to increase to a level between 11.3-11.5 per cent (2018: 10.8 per cent). This, together with continued top-line growth, is expected to once again drive a double-digit-rate improvement of the company’s bottom line. Net income is projected to increase to a level between €1.880-€1.950 billion, reflecting an increase between 10-14 per cent compared to the prior year level of €1.709 billion.
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