Adidas Q4 revenues up but European sales still 'a disappointment'
Business - 14 Mar 2019
Adidas, the German sportswear giant, has reported fourth-quarter revenues of €5.23 billion ($5.9 billion), above analysts’ expectations of €5.17 billion.
However, operating profit was €129 million, below the projected €141.3 million.
Adidas’ currency-adjusted annual turnover increased by 8 per cent to a total of around €22 billion in the fiscal year 2018.
Adidas warned that issues with its supply chain might cause 2019 sales to lag behind those of 2018 by as much as three percentage points.
Meanwhile, European sales were down in 2018, decreasing at a mid-single-digit rate.
Kasper Rorsted, Adidas’ chief executive, said: “Record sales, the highest margin in our history, strong net income improvements - 2018 was another successful year for our company.”
However, he admitted: “There is no doubt that development in Europe was a disappointment for us in 2018, and we have taken appropriate steps to address the issue, and we expect Europe to come back to growth at the end of 2019. But it's clear also with the size of Europe, it has a negative impact in our overall growth rate. So the 8 per cent comes despite the non-contribution from our Europe organisation.”
In November, Adidas reduced its revenue forecast for 2018 after sales failed to match expectations in the third quarter, with a notable slowdown in Western Europe, albeit profits were healthy.
While it has been eating into Nike’s market share in North America, Adidas has seen its power base in Europe eroded by its larger US rival.
• Dave Thomas, formerly head of Adidas’ operations in India, has been promoted to managing director for emerging markets as part of a reshuffle, leaving the company to seek a successor for Thomas in India.
Thomas replaces Martin Shankland who was recently promoted to the Adidas executive board, with responsibility for global operations.