Adi­das makes dent in Un­der Ar­mour's North Amer­ica rev­enue; posts 21% surge

Apparel Online - - Retail Current -

Adi­das, the Ger­many-based sports­wear com­pany, has an­nounced the fi­nan­cial re­sults of the first quar­ter of the cur­rent fis­cal. “The first quar­ter re­sults are as per our ex­pec­ta­tions. North Amer­ica, Greater China and e-com­merce were strate­gic fo­cus ar­eas for the com­pany,” stated CEO Kasper Rorsted. Dur­ing the quar­ter un­der re­view, the sports­wear re­tailer’s rev­enues grew by 10 per cent on cur­ren­cyneu­tral ba­sis and 2 per cent in euro terms.

Adi­das’ op­er­at­ing mar­gin in­creased by 1.8 per­cent­age points to 13.4 per cent in the re­port­ing quar­ter. Its op­er­at­ing profit in­creased by 17 per cent to ¤ 746 mil­lion as com­pared to ¤ 637 mil­lion in the same quar­ter last year. Net in­come from con­tin­u­ing op­er­a­tions in the quar­ter un­der re­view was up 17 per cent to ¤ 542 mil­lion from ¤ 462 mil­lion in the same quar­ter in last fis­cal. From a mar­ket seg­ment per­spec­tive, on a cur­rency-neu­tral ba­sis, the com­bined sales of the Adi­das and Ree­bok brands grew in most mar­ket seg­ments. In North Amer­ica, the com­pany re­ported a 21 per cent in­crease in growth fol­lowed by Asia-Pa­cific with 15 per cent. 26 per cent in­crease in Greater China ma­jorly con­trib­uted to growth in Asia-Pa­cific re­gion. No­tably, the rev­enues re­mained rel­a­tively flat in North Amer­ica for Un­der Ar­mour in the first quar­ter. Latin Amer­ica and West­ern Europe re­ported growth of 10 and 5 per cent, re­spec­tively. The chal­leng­ing mar­ket con­di­tions led to a de­cline in sales in the emerg­ing mar­kets such as Rus­sia/CIS. The sports re­tailer, which has been fac­ing a tough time in the past few years, has now started re­turn­ing to form. In the last quar­ter of fis­cal 2017, it re­ported a 19 per cent in­crease in rev­enue on a cur­rency-neu­tral ba­sis. Adi­das is fac­ing a tough com­pe­ti­tion from Nike and Un­der Ar­mour, which re­ported a 6 per cent in­crease in first quar­ter rev­enue to US $ 1.2 bil­lion. The Ger­man re­tailer now ex­pects to note around 10 per cent in­crease in sales on a cur­rency-neu­tral ba­sis in the com­ing months. North Amer­ica and Asia-Pa­cific have been pro­jected as ma­jor growth driv­ers. Net in­come from con­tin­u­ing op­er­a­tions is pro­jected to in­crease to a level be­tween ¤ 1.615 bil­lion and ¤ 1.675 bil­lion. It re­mains to be seen how Adi­das main­tains its growth rate to com­pete against the likes of Nike and Un­der Ar­mour, which has been rapidly eat­ing on Adi­das’ sports mar­ket in the US.

The sports re­tailer, which has been fac­ing a tough time in the past few years, has now started re­turn­ing to form. In the last quar­ter of fis­cal 2017, it re­ported a 19 per cent in­crease in rev­enue on a cur­rency-neu­tral ba­sis.

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