Sports Business/03/13/2019

Adidas Celebrates Record Year 2018 - and Worries About Europe

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Sporting goods giant Adidas has presented record figures for 2018. The brand is booming in North America and China. But Nike's competitor is struggling on its home market.

Adidas wächst vor allem in Nordamerika und China weiter rasant.
Adidas continues to grow rapidly, particularly in North America and China.

Football World Cup years are good years for the major sports brands - as is the 2018 financial year for Adidas. The sporting goods manufacturer from Herzogenaurach presented record figures on Wednesday.

Currency-adjusted sales increased by 8 % in 2018. After translation of foreign revenues, sales in euros rose by 3% to €21.915 billion (2017: €21.218 billion). The operating margin improved by 1.1 percentage points to 10.8%.

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European Turnover Stays a Problem

The main sales drivers for Adidas were the North American and Asia-Pacific markets. While Adidas and Reebok combined posted 15% sales growth in North America, China posted a strong 23% increase (Asia-Pacific +15% overall).

By contrast, sales stagnated in Europe, where Adidas even recorded declines in sales in the last three quarters of 2018. In the 4th quarter of 2018 alone, European sales fell by 6 %. In the emerging markets, sales declined by 3%.

CEO Kasper Rorsted: "2018 a successful year"

"Record sales, the highest margin in our history, strong net income improvements – 2018 was another successful year for our company," said Adidas CEO Kasper Rorsted: "We have made great strides toward and are confirming our 2020 financial ambition. Our strategic growth drivers – adidas North America, China and e-commerce – once again delivered double-digit growth. In 2019, we will continue to drive the execution of ‘Creating the New’ to deliver another year of quality top-line growth and overproportionate bottom-line improvements."

Adidas expects moderate sales growth of between 5% and 8% for the 2019 non-World Cup and non-Olympic years. The company is experiencing a sharp increase in demand for mid-priced apparel, which cannot be fully met immediately due to production capacity bottlenecks.

As a result, the company expects sales growth to be impacted, particularly in the first half of the year in North America.