Adidas Group has released a new report on its sales growth for the first quarter of the year, highlighting its performance in specific regions and product categories.
Adidas reported robust global growth for the first quarter of the year, with revenue growing 22 percent on a currency-neutral basis, or 17 percent on Euro terms to 4.8 billion ($5.3 billion). This was driven by increased momentum at both Adidas (up 26 percent) and Reebok (up 6 percent), the latter of which posted its twelfth consecutive quarter of growth.
Adidas’ millennial-targeted Neo line saw the largest growth of all Adidas Group categories, up 60 percent in the first quarter of the year. This was followed by the Adidas Originals brand (up 45 percent), Adidas Football (25 percent), Running (19 percent), and Training (15 percent).
Adidas Group reported strong top-line growth globally, with double-digit sales increases across almost all regions of the world. The largest growth area was in Asia, where sales were up 44 percent in Japan and 30 percent in Greater China, the eighth consecutive quarter of growth. Interest in running was also attributed to Reebok’s 20 percent growth in revenue in Greater China.
In North America, sales were up 22 percent, fueled by growth in performance and lifestyle categories. In Western Europe sales climbed by 25 percent, although gross margins declined, which Adidas blamed on “strong Forex headwinds.” Russia/CIS countries, meanwhile, were the only region of the world not to report double-digit sales gains, up only two percent.
For the rest of 2016 Adidas Group said it expects sales to increase at a rate of around 15 percent, and gross margin decline to be limited to a maximum of 50 basis points. The company also reported its operating margin will increase to a level of around seven percent, while net income is expected to increase at a rate of around 25 percent to 900 million Euros.