Adidas Boasts “Highest Margins in History”

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By Published On: March 15, 20190 Comments

Adidas has reported its full 2018 results, claiming the brand reached double-digit growth through its e-commerce platform and in regions such as North America and Greater China.

In the last 12-months, Adidas grew its currency-neutral revenue by eight percent, while also achieving double-digit growth in a number of its key markets. During this time, the sports manufacturer also reported a growth of 20 percent in net income from continuing operations, while its Reebok brand returned to profitability.

From a channel perspective, the company’s top line increase was largely driven by double-digit improvements in direct-to-consumer revenues with particularly strong support from e-commerce, where revenues grew 36 percent to more than € 2 billion in 2018.

In a statement, the company’s CEO, Kasper Rorsted said the brand has taken great strides towards reaching its 2020 financial ambitions.

“Record sales, the highest margin in our history, string net income improvements – 2018 was another successful year for our company,” he said.

“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 over proportionate bottom-line improvements,” he continued.

Looking towards 2019, Adidas expects top-line sales to grow between five and eight percent, with continued investments in e-commerce expected to drive performance.

Speaking to CNBC after the business’s financial update was released, Rorsted said he sees “tremendous opportunity” in the brand’s digital capabilities.

“There is no doubt e-commerce and e-commerce through a mobile environment is the future of our company,” he said.

According to Rorsted, the mobile app that Adidas launched last year has already had more than seven million downloads across 25 countries. He does note, however, that the brand does need to maintain a strong cross-channel presence if it wants to make the most of the digital economy.

“We think e-commerce is still in its early days, and there’s going to be a tremendous opportunity – but you have to couple it with big franchise stores or flagship stores where you can see the product,” he said.

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