Adidas Q3 revenues jump 17 percent, outlook positive
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Business
Adidas Group sales increased 17 percent in the third quarter on a currency-neutral basis with Adidas brands sales rising 20 percent and Reebok reporting a growth of 7 percent. The company witnessed double-digit growth in all markets except Russia/CIS. Net income from continuing operations improved 15 percent to 387 million euros (430 million dollars). Management confirmed outlook for FY 2016 and expects currency-neutral Group sales to increase at a high-teens rate and net income to improve to a level between 975 million euros (1,084 million dollars) and 1 billion euros (1.1 billion dollars).
“I am extremely happy to be the CEO of a company that is doing so well. The great momentum across all major markets shows the strength of our strategy ‘Creating the New’ because it is driving significant improvements in the desirability of our brands across the globe,” said Kasper Rorsted, Adidas Group CEO.
Adidas says results positive despite tougher comparisons
Group revenues increased 17 percent and in euro terms, revenues grew 14 percent to 5.413 billion euros (6.018 billion dollars). In particular, the company said, Adidas brand continued its strong momentum with revenues up 20 percent on a currency-neutral basis, fuelled by double-digit sales increases in sport performance, at Adidas Originals as well as at Adidas Neo. With the exception of Russia/CIS, where revenues grew at a mid-single-digit rate, Adidas recorded double-digit growth in every geography.
Reebok revenues grew 7 percent during the quarter, with sales growth across all regions. This development was supported by double-digit sales increases in the running category as well as in Classics. TaylorMade-Adidas Golf revenues increased 6 percent currency-neutral, driven by strong double-digit growth in the metalwoods and putters categories.
From a market segment perspective, combined currency-neutral sales of the Adidas and Reebok brands grew at double-digit rates in all segments except Russia/CIS, where revenues increased at a high-single-digit rate. Revenues in Western Europe increased 15 percent, driven by the UK, Germany, France, Italy, Spain and Poland, where revenues grew at double-digit rates each. Growth trends in North America and Greater China remained strong, as reflected in sales increases of 20 percent and 25 percent, respectively.
Revenues in Russia/CIS were up 7 percent on a currency-neutral basis. In Latin America, revenues grew 16 percent, reflecting double-digit sales increases in Argentina, Peru and Colombia as well as high-single-digit growth in Mexico and Chile. In Japan, sales were up 21 percent, while sales in MEAA grew 19percent, driven by double-digit growth in South Korea, Australia, the United Arab Emirates, South Africa, India and Thailand.
Revenues for other businesses grew 7 percent in the third quarter. Double-digit sales increases in other centrally managed businesses as well as mid-single-digit growth at TaylorMade-Adidas Golf were partly offset by sales declines at CCM Hockey, reflecting the overall challenging market conditions in the US hockey market.
The Group’s net income from continuing operations increased 15 percent to 387 million euros (430 million dollars). The Group’s net income attributable to shareholders, grew 24 percent to 386 million euros (429 million dollars) from 311 million euros (345 million dollars) in the third quarter of 2015. Basic EPS from continuing and discontinued operations increased 24 percent to 1.93 euros (2.15 dollars). Diluted EPS grew 21percent to 1.88 euros (2.09 dollars).
Adidas revenues jump 20 percent in the first nine months
In the first nine months of 2016, Group revenues increased 20 percent on a currency-neutral basis, driven by strong double-digit growth at Adidas and high-single-digit sales increases at Reebok. In euro terms, Group revenues grew 15 percent to 14.604 billion euros (16.235 billion dollars). All market segments posted currency-neutral sales increases, with double-digit growth across all regions except Russia/CIS, where revenues grew at a mid-single-digit rate.
At 48.6 percent, the Group’s gross margin decreased 0.1 percentage points versus the prior year level and diluted EPS from continuing and discontinued operations grew 46 percent.
Adidas confirms 2016 outlook
Against the background of the outstanding financial performance in the first nine months of 2016, management has confirmed the outlook for the full year despite one-time costs in the second half of the year related to measures aimed at strengthening the Group’s growth foundation. The company expects revenues to increase at a rate in the high teens on a currency-neutral basis in 2016. The top-line development will be supported by double-digit growth in all regions except Russia/CIS, where sales are forecasted to grow at a mid-single-digit rate.
In 2016, the Group’s gross margin is expected to be at a level between 48 percent and 48.3 percent compared to the prior year level of 48.3 percent.
In short- Adidas expects revenues to increase at a rate in the high teens on a currency-neutral basis in 2016
- The top-line development es expected to be supported by double-digit growth in all regions except Russia/CIS
Picture:Adidas