GERMANY: Currency headwinds impact Adidas Q3 profit
- Q3 net profit down 8% to EUR316m
- Group revenues fall 7% to EUR3.879bn
- CEO blames decline on “severe currency headwinds”
Sporting goods giant Adidas saw profits and revenues both fall in the third quarter, impacted by unfavourable exchange rates.
On a constant currency basis, group sales were stable, but fell back 7% in reported terms, sending net profit down 8% compared to last year.
Revenues in Western Europe were down 6%, with the company blaming high prior year comparisons with the London Olympics, as well as ongoing macroeconomic challenges.
However, revenues in European emerging markets rose 2%, with growth reported in most of the region’s countries.
Sales declines in TaylorMade-Adidas Golf sent revenues in North America down 5%, but Greater China posted a 9% sales increase, amid continued momentum across all channels.
Other Asian markets were up 4%, with sales increases in most major markets, and Latin America rose 12%, fuelled by strong growth in all key markets.
The Adidas brand’s revenues were flat on a currency neutral basis, while Reebok was up 5% and TaylorMade-Adidas Golf slumped by 16%.
Meanwhile, Reebok-CCM Hockey revenues increased 4% in the quarter, but Rockport declined by 4%.
Gross margin was up 1.9 percentage points to 49.3%, thanks to a more favourable pricing, product and regional sales mix, as well as a larger share of higher-margin retail sales, which more than offset a less favourable hedging rate.
“Our third quarter performance was negatively impacted by severe currency headwinds, unexpected short-term distribution constraints in Russia/CIS, as well as our actions to rebalance our inventories in the global golf market,” said Adidas CEO Herbert Hainer.
“Despite these challenges, we delivered stable earnings per share in the first nine months.”
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