Adidas Q1 results
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Currency-neutral net sales for the German sporting goods giant Adidas-Salomon Group rose 11 per cent for the first quarter 2005. The first quarter operating profit increased by 27 per cent to EUR179 million (GBP126.75 million) from EUR142 the previous year. The gross margin improved 1,0 percentage points to 46.9 per cent of sales, up from 45.9 per cent the year before. Meanwhile, net income climbed 46 per cent to EUR105 million, compared with EUR72 million in 2004.
Adidas-Salomon Chairman and CEO, Herbert Hainer, said: "Adidas-Salomon has got off to a powerful start in the first quarter of 2005. By every key measure - sales growth, margin improvement and profitability - we've delivered outstanding performance."
Significant growth was achieved in nearly all Sport Performance categories, especially in the Sport Heritage division. Revenues at Salomon decreased by 8 per cent in the first quarter, due to lower sales of inline skates, cycling components and major winter sports categories. Meanwhile TaylorMade-adidas Golf performed strongly, with an increase in revenues of 31 per cent to EUR149 million, mainly due to sales increase in metalwoods, irons, golf balls and apparel categories.
The Group's net borrowings at 31 March 2005 were down by 40 per cent at EUR416 million as opposed to EUR1.045 the year before, thanks to strong bottom-line profitability and continued tight working capital management.
Earnings growth for the full year is expected to reach the mid- to high single digits. Asia and Latin America are generating an increasingly positive outlook, where growth is expected to be in the double digits. North America's growth is expected to hit the high single digits while Europe should reach mid-single digit growth.
"We are off and running hard in 2005. With the highest currency-neutral backlogs in more than two years in North America and the 15th consecutive quarter of double-digit backlog growth in Asia, our position in two of the key growth markets is stronger than ever before," said Hainer.