Adidas increases turnover thanks to strong business in China, N. America

2019-03-13 14:04

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BERLIN, March 13 (Xinhua) -- Adidas increased its currency-adjusted annual turnover by eight percent to a total of around 22 billion euros (24.8 billion U.S. dollars) in the fiscal year 2018, the German sports equipment manufacturer announced on Wednesday.

The increase in turnover was mainly based on strong business in North America as well as in China, where sales grew particularly strong by 23 percent. In addition, Adidas increased its e-commerce business turnover by 36 percent to a total of more than 2 billion euros in 2018.

Net profits of adidas' continuing operations increased by 20 percent to 1.7 billion euros. Adidas' operating profit margin grew by 1.1 percentage points to 10.8 percent due to an increased gross margin, which "more than offset the investment-led increase in other operating expenses," according to the company.

"Record sales, the highest margin in our history, strong net income improvements - 2018 was another successful year for our company," commented Kasper Rorsted, chief executive officer of Adidas.

Although Adidas has been experiencing a strong demand for mid-priced sports apparel, Europe's largest sports equipment manufacturer announced that it would not be able to fully cover this demand due to supply chain shortages.

Growth would therefore be "negatively impacted", especially in North America, during the first half of the current fiscal year.

For the full fiscal year 2019, Adidas is expecting turnover to increase at a rate of 5 to 8 percent, while profit growth is set to range between 10 and 14 percent up to 1.95 billion euros.

Investors showed little satisfaction with Adidas' shares after the publication of the company's annual results on Wednesday. Shares temporarily dropped by over 5 percent in the German stock index DAX. While Adidas was the biggest loser at the start of trading, its shares regained some of their losses throughout the day.

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