BERLIN — Adidas Group improved its profit performance in the first quarter, with net income gaining 6 percent to 308 million euros, or $406.8 million.
Gross margin increased 2.4 percentage points to 50.1 percent, the group’s “highest-ever” quarterly gross margin, which was above 50 percent for only the second time in its history. Adidas cited a positive impact from more favorable pricing, product and regional sales mix as well as a larger share of higher margin retail sales for the development.
The sales picture was impacted by currency effects and particularly strong sales comparisons from the previous year fueled by UEFA Cup and Olympics-related business. Sales slipped 2 percent to 3.75 billion euros, or $4.95 billion, in the three-month period ended March 31.
On a currency-adjusted basis, sales were flat for the quarter.
The group’s wholesale business was down 5 percent to 2.48 billion euros, or $3.28 billion, while retail sales, driven by both the Adidas and Reebok brands, grew 4 percent to 722 million euros, or $953.7 million.
Dollar figures are converted from euros at average exchange rates for the period in question.
Regionally, greater China posted the strongest sales gains, 6 percent, followed by 4 percent in Latin America, 2 percent in North America and 1 percent in European emerging markets. Sales in the group’s largest market, Western Europe, fell 7 percent, pressured by declines in Spain, Italy and the U.K. Other Asian markets posted a 10 percent drop, dragged down by Japan.
In a conference call, Adidas chief executive officer Herbert Hainer said, “The Adidas brand again came out on top, despite running up against some high numbers in the previous year’s quarter.” Adidas brand sales were up 1 percent, with double-digit growth in all key categories, he said. In the running segment, where sales rose 12 percent, he called the February launch of Energy Boost “the most successful running shoe launch from a commercial standpoint ever. We were almost completely sold through, and presales via e-commerce were up too.”
As for Reebok, where sales for the quarter were down 14 percent in constant currencies, he said the performance was in line with expectations. He predicted the brand’s return to growth later this year with new footwear product launches during the back-to-school period.
Double-digit sales increases at TaylorMade-adidas Golf drove revenues in the group’s Other Businesses unit up 6 percent for the quarter.
For the year ahead, Adidas confirmed its guidance, which forecasts a midsingle-digit increase in currency-neutral sales, but noted “currency translation is expected to negatively impact top-line development in reported terms.”
Net income attributable to shareholders is expected to reach 890 to 920 million euros, or $1.16 billion to $1.2 billion at current exchange, compared with 791 million euros in 2012. “Despite negative currency translation, we are forecasting a net increase of between 12 and 16 percent, a new record level,” Hainer declared. Improvements in the group’s gross margin, lower other operating expenses as a percentage of sales and more favorable tax rates are expected to propel the group’s earnings momentum.
@chanel and @pharrell dropped what’s being dubbed as the world’s most exclusive sneakers yesterday. The Adidas Originals NMD Hu, which Williams designed in collaboration with Chanel and @adidasoriginals, has a waiting list of over 120K people who pre-registered online at chanelatcolette.fr –– and only 500 pairs are on sale. The singer predicted the resale value of the shoes could reach $40K. Read the full interview on WWD.com. Link in bio. #wwdfashion
@imanshumpert is diving deeper into his creative endeavors and relaunching his clothing line, Post 90s, and is helping to raise money for the hurricane victims in St. Maarten with a jersey he’s designed with his brother. The Cleveland Cavaliers player talked to WWD about kneeling during the national anthem, working with fashion brands and how he wants to be more than an @nba player. Read the interview on WWD.com #wwdfashion (📷: George Chinese)
Not only does #TheProfit return to CNBC tonight, but @marcuslemonis has launched @shopmarcus, a new shopping and lifestyle retail experience in Aspen and Chicago, with more locations to come. The retail stores offer in-store stylists and a variety of contemporary womenswear selections.
“It’s life, I’m going to face it,” @mingxi11 sighed. “I fell, but you know, I think the most important thing is that I get back up. I had the love, the help from my sister — the girl next to me Gizele [Oliveira] — she’s so nice. When I went backstage everybody was trying to comfort me like ‘Oh Ming, it’s OK.’ I’m really, really touched. I think it’s them who gave me the courage to go back on stage for the finale,” Xi told WWD of her fall at the @victoriassecret fashion show. (📷: David Fisher) #wwdfashion #vsfashionshow #victoriassecret
@louisvuitton tapped @therealpeterlindbergh for its latest city-centric photo book, which is part of a series called Fashion Eye. The primarily black and white book captures the spirit of Berlin in 57 images shot between 1989 and 2019. “Berlin is an inspiration for me, more than a city. I mean @millajovovich is simply Berlin!” said Lindbergh. #wwdfashion
“You know, I think audiences expect a certain performance so I have to deliver to them what they’re expecting to a certain degree. But I’m also a different actor and a different person, I have my own spin on the character,” says @noahegalvin of his takeover of the leading role in “Dear Evan Hansen” following the departure of @bensplatt, who originated the role. Read WWD’s interview with the 23-year-old actor on WWD.com #wwdeye (📷: @jilliansollazzo)
For pre-fall 2018, @etro created richly-colored wonderland, using tapestries, textiles and wallpapers from the Eastern world at large. The line featured floral and graphic prints and jacquard motifs, like this two-piece look featured here. #wwdfashion (📷: Giovanna Pavesi)
@kith is moving into children’s. The men’s and women’s streetwear brand has launched Kidset, a Kith kids line located in New York at 64 Bleecker Street. The line includes mini versions of staple Kith pieces like the Astor bomber jacket and the Kith box logo sweatshirts, along with a wall that can display up to 120 pairs of shoes from @adidas, @newbalance, @timberland and more. #wwdfashion
“I just wanted to create this fully rounded character, but I do think what excited me most was just the opportunity to give a group of people representation that I feel needs it. I like to do characters in projects that stand for something and Karolina definitely does, so that was really exciting to me,” @ginnygardner says of her new role in @hulu’s “The Runaways.” Gardner plays Karolina Dean, a queer superhero, which is a rarity for @marvel. Read more about Gardner’s character on WWD.com #wwdeye (📷: @dandoperalski)