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adidas group beats trend to post double digit growth in Q3

06
Nov '08
The adidas group released its results for the third quarter and first nine months of 2008.

Third quarter adidas Group currency-neutral sales grow 11%:
During the third quarter of 2008, Group revenues grew 11% on a currency-neutral basis, driven by double-digit sales growth in the adidas and TaylorMade-adidas Golf segments. While adidas revenues increased 15%, TaylorMade-adidas Golf sales grew 12% on a currency-neutral basis.

Revenues in the Reebok segment declined 1%. Currency movements negatively impacted Group sales in euro terms. Group revenues grew 5% in euro terms to € 3.083 billion in the third quarter of 2008 from € 2.941 billion in 2007.

Third quarter EPS increases 6%:
The Group's gross margin increased 0.4 percentage points to 49.0% (2007: 48.6%) in the third quarter as a result of an improving regional mix, further own-retail expansion and favorable currency movements. These effects more than offset higher sourcing costs.

Group gross profit increased 6% to € 1.511 billion (2007: € 1.429 billion). The Group's operating margin decreased 0.7 percentage points to 15.3% in the third quarter of 2008 versus 16.0% in the prior year as a result of higher operating expenses as a percentage of sales.

Operating profit, however, increased slightly to € 473 million versus € 471 million in 2007. The Group's net income attributable to shareholders grew 2% to € 302 million (2007: € 298 million), supported by a lower tax rate. As a result of the lower weighted average number of shares due to the share buyback program, earnings per share increased at a stronger rate. Basic EPS for the third quarter grew 6% to € 1.54.

adidas Group currency-neutral sales grow 11% in the first nine months of 2008:
During the first nine months of the year, Group revenues increased 11% on a currency-neutral basis, driven by double-digit sales growth in the adidas and TaylorMade-adidas Golf segments. The adidas segment grew 16%, the Reebok segment decreased 2% and TaylorMade-adidas Golf segment sales increased 11%.

Currency movements negatively impacted Group sales in euro terms. Group revenues grew 4% in euro terms to € 8.225 billion in the first nine months of 2008 from € 7.879 billion in 2007.

"We have again delivered a strong set of financial results. Momentum in the adidas and TaylorMade-adidas Golf segments has clearly continued," commented adidas Group CEO and Chairman Herbert Hainer. "And this is despite mounting pressure on retail markets and consumer spending around the globe."

Sales increase strongly in nearly all regions:
During the first nine months of the year, adidas Group sales grew at double-digit rates in all regions except North America where revenues declined. Group sales in Europe grew 13% on a currency-neutral basis in the first nine months of 2008 as a result of strong increases in most countries.

In North America, Group revenues declined by 7% on a currency-neutral basis due to lower sales in the USA. Sales for the Group in Asia increased 23% on a currency-neutral basis in the first nine months of 2008, driven by particularly strong growth in China.


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