adidas group beats trend to post double digit growth in Q3

06 Nov '08

8 min read

In Latin America, currency-neutral sales grew 39% in the first nine months of the year, with double-digit increases coming from all of the region's major markets. This development was also supported by the first-time consolidation of Reebok's joint ventures in the region. Currency translation effects negatively impacted sales in euro terms in all regions.

Sales in Europe increased 9% in euro terms to € 3.776 billion in 2008 from € 3.455 billion in 2007. Revenues in North America decreased 17% to € 1.871 billion in 2008 from € 2.248 billion in the prior year. In euro terms, revenues in Asia grew 16% to € 1.875 billion in 2008 from € 1.616 billion in 2007. Sales in Latin America grew 34% to € 647 million in 2008 from € 484 million in the prior year.

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.

In Latin America, currency-neutral sales grew 39% in the first nine months of the year, with double-digit increases coming from all of the region's major markets. This development was also supported by the first-time consolidation of Reebok's joint ventures in the region.

Currency translation effects negatively impacted sales in euro terms in all regions. Sales in Europe increased 9% in euro terms to € 3.776 billion in 2008 from € 3.455 billion in 2007. Revenues in North America decreased 17% to € 1.871 billion in 2008 from € 2.248 billion in the prior year.

In euro terms, revenues in Asia grew 16% to € 1.875 billion in 2008 from € 1.616 billion in 2007. Sales in Latin America grew 34% to € 647 million in 2008 from € 484 million in the prior year.

Record Group gross margin:
The Group gross margin increased by 1.7 percentage points to 49.4% during the first nine months of 2008 (2007: 47.7%), driven by improvements in the adidas and TaylorMade-adidas Golf segments. This highest-ever first nine months rate was related to an improving regional and product mix, increased own-retail activities as well as favorable currency movements.

Cost synergies resulting from the Reebok integration into the adidas Group also continued to have a positive impact. Input price increases had only a modest negative impact on the cost of sales development in the first nine months of 2008. As a result of the Group's strong top-line growth and gross margin improvement, gross profit for the adidas Group rose 8% in the first nine months of 2008 to reach € 4.062 billion versus € 3.755 billion in the prior year.

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