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adidas with outstanding financial performance

May 6, 2016 Germany
adidas with outstanding financial performance
The group has announced first quarter results. FY 2016 guidance increased in light of strong brand momentum
Herbert Hainer, adidas group CEO, commented: “Strong double-digit growth in key markets and key categories underlines the broad-based momentum and the strong desirability of our brands and products around the globe. I am particularly pleased with our strong development in North America. This shows that our focus on this important market is paying off. Our strong Q1 performance is the ideal platform for strong and sustainable top- and bottom-line improvements – in 2016 and beyond”.

The adidas group recorded a very strong start into the year 2016. During the first quarter, the group revenue increased by 22% on a currency-neutral basis, with accelerating momentum at both adidas and Reebok. In euro terms, group revenue grew by 17% totaling 4.769 billion euros (4.083 billion euros in similar period last), the highest quarterly revenue in the group’s history.

From a brand's perspective, currency-neutral adidas revenues grew by 26%, driven by double-digit sales increases in the training, football and running categories as well as at adidas Originals and adidas Neo. While adidas recorded growth in every geography, brand momentum was particularly strong in key regions such as North America, Greater China and Western Europe, where revenues were up by 31%, 30% and 26%, respectively. With currency-neutral Reebok sales increasing by 6% versus the prior year, the brand recorded its 12th consecutive quarter of growth. The brand’s performance was supported by double-digit growth in Western Europe, Greater China, Latin America, Japan and MEEA. Revenues at TaylorMade-adidas Golf decreased by 1% currency-neutral, as growth at the core brands TaylorMade and adidas Golf was more than offset by sales declines at Ashworth and Adams.

From a market segment perspective, combined currency-neutral sales of the adidas and Reebok brands grew in all segments in the first quarter of 2016, with double-digit growth rates in Western Europe, North America, Greater China, Latin America, Japan and MEAA. Revenues in Western Europe increased by 25% on a currency-neutral basis, driven by the UK, Germany, Italy, France and Poland, where revenues grew at double-digit rates each. Currency-neutral sales in North America and Greater China saw strong acceleration during the quarter, up by 22% and 30%, respectively. Despite an ongoing challenging macroeconomic environment, Russia/CIS returned to growth with currency-neutral sales up by 2%. In Latin America, revenues grew by 19% on a currency-neutral basis, reflecting double-digit sales increases in markets such as Argentina, Mexico, Chile and Brazil. In Japan, sales were up by 44% on a currency-neutral basis. Currency-neutral sales in MEAA grew by 17%, driven by high-single-digit growth in South Korea as well as double-digit improvements in Australia, the United Arab Emirates and Turkey.

Revenues in Other Businesses were up by 6% on a currency-neutral basis, as strong double-digit sales growth in Other centrally managed businesses was only partly offset by sales declines at TaylorMade-adidas Golf and Reebok-CCM Hockey.

In light of the strong brand momentum, which is reflected in the better than expected first quarter performance, the group has increased its 2016 financial outlook. adidas group sales are now expected to increase at a rate of around 15% (previously: between 10% and 12%) on a currency-neutral basis in 2016. The top-line expansion will be supported by double-digit growth in all regions except Russia/CIS. 

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