German sportswear brand Adidas has announced its financial results for first quarter of the current fiscal. During the period under review, net income from continuing operations for the retailer climbed 30 per cent to € 455 million, while currency-neutral revenues soared 16 per cent.
In the said period, gross margin declined 0.2pp as a result of anticipated FX headwind and operating margin improves 0.9 percentage points to 11.1 per cent. This development reflects an 18 per cent increase at brand Adidas as well as a 13 per cent surge at the Reebok brand.
The major drivers of the top-line improvement at Reebok were strong double-digit sales increases in the training category and in Classics. From a channel perspective, the company’s growth was particularly strong in eCommerce, where revenues grew 53 per cent in first quarter.
In Euro terms, sales were up 19 per cent in the first quarter to € 5.671 billion (2016: € 4.769 billion). Revenue growth at Adidas brand was driven by double-digit increases in the running and outdoor categories as well as at Adidas Originals and Adidas Neo.
“We had a strong start into the year, with continued sales and earnings momentum. Our major brands Adidas and Reebok as well as all of our key markets posted double-digit sales increases,” Adidas CEO Kasper Rorsted said in a statement issued by the company.
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For 2017, Adidas continues to expect sales to increase at a rate between 11% and 13% on a currency-neutral basis driven by double-digit growth in Western Europe, North America and Greater China.
The company’s gross margin is forecasted to increase up to 0.5 percentage points to a level of up to 49.1 per cent (2016: 48.6 per cent). Gross margin will mainly benefit from the positive effects of an improved pricing, product and regional mix as well as further enhancements in the company’s channel mix.
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