German sportswear brand, Adidas, has announced its financial report for 2016 fiscal year. During the period under review, net income from continuing operations climbed 41 per cent to € 1.019 billion. Its sales reached € 19.3 billion, up 18 per cent on a currency-neutral basis while operating margin improves 1.3pp to 7.7 per cent.
In 2016, despite severe headwinds from negative currency effects, the company’s gross margin increased 0.3 percentage points to 48.6 per cent (2015: 48.3 per cent), as a result of the positive effects from a significantly better pricing, product and channel mix as well as lower input costs.
During the fourth quarter, Adidas continued to deliver a strong top- and bottom line performance. Its revenues increased 14 per cent on a currency-neutral basis.
In the fourth quarter of 2016, the company’s gross margin increased 1.6 percentage points to 48.8 per cent compared 47.2 per cent in 2015. More favourable pricing, product and channel mix as well as lower input costs more than offset the negative effects from currency headwinds.
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For 2017, the retailer expects sales to increase at a rate between 11 per cent and 13 per cent on a currency-neutral basis. In 2017, the gross margin is forecasted to increase up to 0.5 percentage points to a level of up to 49.1 per cent (2016: 48.6 per cent).
“2016 was an exceptional year for Adidas. We have improved the desirability of our brands and products around the globe. As a consequence, we were able to increase revenues strongly and achieve a record net income of more than € 1 billion for the first time in the history of our company,” Kasper Rorsted, CEO, Adidas was quoted as saying while commenting on the results.
