Adidas revenues soar 3 percent in FY13 and 12 percent in Q4

Wednesday, 05 March 2014
REPORT_ In the fourth quarter of 2013, Adidas reported that the group revenues grew 12 percent on a currency-neutral basis. Currency-neutral sales in retail and other businesses increased 15 percent and 28 percent, respectively. Sales in the wholesale segment grew 8 percent on a currency-neutral basis.


In 2013 the group revenues grew 3 percent on a currency-neutral basis, as a result of sales increases in retail and other businesses. Currency-neutral wholesale revenues remained stable compared to the prior year. Group sales were below management’s initial expectations of an increase at a mid-single-digit rate. Currency translation effects had a negative impact on sales in euro terms. Group revenues decreased 3 percent to 14.492 billion euros (19.898 billion dollars) in 2013 from 14.883 billion euros (20.435 billion dollars) in 2012.

Currency-neutral revenues in Western Europe increased 3 percent, supported by strong double-digit growth at Reebok and TaylorMade-adidas Golf. In European emerging markets, currency-neutral sales were up 11 percent as a result of double-digit revenue growth at both adidas and Reebok. Group sales in North America increased 14 percent on a currency-neutral basis, driven by double-digit sales increases at adidas, TaylorMade- adidas Golf and Reebok-CCM Hockey. In Greater China, Group sales were up 8 percent on a currency-neutral basis, driven by strong double-digit sales gains at Adidas Originals & Sport Style.

Currency-neutral revenues in other Asian markets grew 15 percent, due to double-digit increases at adidas and TaylorMade-adidas Golf. In Latin America, adidas Group sales were up 32 percent on a currency-neutral basis driven by strong double-digit growth at Adidas and Reebok. Currency translation effects had a negative impact on sales in euro terms. Group revenues grew 3 percent to 3.479 billion euros (4.777 billion dollars) in the fourth quarter of 2013 from 3.369 billion euros (4.625 billion dollars) in 2012.

“We finished 2013 with an exceptionally strong fourth quarter. Currency-neutral sales grew 12 percent, which was above our expectations,” commented Herbert Hainer, Adidas Group CEO, adding, “This ensured that we met our revised full year targets from September, despite a further worsening of currency exchange rates. In the fourth quarter alone, negative currency effects cost us 9 percentage points on the top line.”

The group’s gross margin decreased 0.1 percentage points to 47.5 percent in the fourth quarter. Gross margin development was positively impacted by a more favourable pricing, product and regional sales mix as well as lower input costs during the fourth quarter. This, however, was more than offset by the negative effects resulting from a less favourable hedging rate. Group gross profit increased 3 percent.

In 2013, currency-neutral wholesale revenues remained stable. While sales at Reebok grew at a low-single-digit rate, revenues at adidas remained at the prior year level. Currency-neutral Retail sales increased 8 percent versus the prior year, as a result of sales growth at both adidas and Reebok. Revenues in other businesses were up 5 percent on a currency-neutral basis, driven by sales increases at TaylorMade-adidas Golf, Reebok- CCM Hockey and Rockport. Currency translation effects had a negative impact on segmental sales in euro terms.

In 2013, revenues in Western Europe decreased 6 percent on a currency-neutral basis, mainly due to sales declines in the UK, Italy and Spain. In European emerging markets, group sales increased 4 percent on a currency-neutral basis as a result of sales growth in most of the region’s major markets. Sales for the adidas Group in North America grew 2 percent on a currency-neutral basis, due to sales increases in both the USA and Canada. Sales in Greater China increased 7 percent on a currency-neutral basis. Currency-neutral revenues in other Asian markets grew 5 percent, driven by strong increases in India, South Korea and Australia. In Latin America, sales grew 19 percent on a currency-neutral basis with double- digit increases in most of the region’s major markets, in particular Argentina, Colombia and Mexico. Currency translation effects had a negative impact on regional sales in euro terms.

Adidas group sales are forecasted to increase at a high-single-digit rate on a currency- neutral basis in 2014. In particular, this year’s major sporting events are expected to provide positive stimulus to group sales. As the official partner of the 2014 FIFA World Cup in Brazil, the Adidas brand will be the most visible brand during the event and will benefit from record sales in the football category. Group sales development will also be favourably impacted by the group’s high exposure to fast-growing emerging markets as well as the further expansion of retail. In 2014, the Adidas Group gross margin is forecasted to increase to a level between 49.5 percent and 49.8 percent.

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