Driven by currency translation effects that had a positive impact on sales in euro terms, Adidas reported a 17 per cent year over year sales surge in the first quarter ended March 31, 2015.
In the first quarter of 2015, Adidas Group revenues grew 17 per cent to €4.083 billion from €3.480 billion in the first quarter of 2014.
Driven by a double digit increase at Adidas as well as high single digit growth at Reebok, the German sports good marketer posted a 9 per cent year on year revenue hike on a currency-neutral basis.
Currency-neutral Adidas revenues increased 11 per cent which was driven by double-digit sales increases in running, at Adidas Originals and Adidas NEO as well as training.
Reebok sales on a currency-neutral basis were up 9 per cent versus the prior year first quarter as a result of double-digit sales increases in the training, studio categories and Classics.
However TaylorMade-Adidas Golf revenues declined 9 per cent on currency-neutral basis, mainly due to sales declines in the metalwoods and irons categories, which more than offset a double-digit increase in golf apparel.
In the reporting quarter, gross profit too soared 17 per cent to €2.008 billion as against €1.712 billion in the same quarter from the previous year.
But, gross margin remained unchanged at 49.2 per cent vis-à-vis the first quarter of 2014 due to a more favourable product and pricing mix, which was offset by higher input costs as well as negative currency effects.
As a result of the change in the composition of its reportable segments and associated cash-generating units, Adidas recorded goodwill impairment losses of €18 million during the first quarter of 2015.
“Goodwill for these groups of cash-generating units is now completely impaired and the impairment losses were non-cash in nature and do not affect Adidas Group's liquidity,” it added.
Financial income more than doubled to €16 million in the quarter under review compared to €7 million in the prior year first quarter, as a result of positive exchange rate effects.
On the other hand, financial expenses plunged 22 per cent from a year ago quarter to €16 million in the first quarter of 2015, led by non-recurrence of negative exchange rate effects compared to the prior year period.
The Group's net income from continuing operations increased 13 per cent to €237 million in the first quarter of 2015 from €209 million in same quarter of last year.
“Excluding goodwill impairment losses, net income from continuing operations was up 22 per cent to €255 million,” Adidas informed.
The Group's tax rate increased 2.5 percentage points to 31.4 per cent in the first quarter of 2015 from 28.9 per cent, while excluding goodwill impairment losses; effective tax rate grew 0.9 percentage points.
First quarter of 2015 basic EPS from continuing operations drove up 16 per cent to €1.15 as against €0.99 in same quarter of 2014 and excluding goodwill impairment losses, basic EPS rose 25 per cent.