Reebok 2007 Annual Report Download - page 126

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ANNUAL REPORT 2007 --- adidas Group GROUP MANAGEMENT REPORT – OUR FINANCIAL YEAR - Outlook
GROUP GROSS MARGIN TO FURTHER IMPROVE In 2008, the
adidas Group gross margin is expected to increase modestly
to a range of 47.5 to 48 %, driven by improvements in all three
brand segments.
Gross margin improvement in the adidas segment will be
largely related to further own-retail expansion and an improv-
ing product and regional mix.
We also anticipate a gross margin improvement in the Reebok
segment due to an improving product mix as a result of the
focus on higher- margin product segments. Lower clearance
activities as well as an improving distribution and regional mix
are also expected to contribute to gross margin expansion
within the Reebok segment. Further, for both adidas and
Reebok, we will con tinue our efforts to increase operational
effi ciency throughout the Group’s supply chain in 2008, which
will continue to positively impact cost of sales.
The gross margin at TaylorMade-adidas Golf is also expected
to increase, largely driven by an improving product mix and
lower clearance acti vities.
In addition, the expiration of the Group’s cooperation agreement
with Amer Sports Corporation in the fi rst quarter of 2008 is
expected to support gross margin development in the HQ / Con-
solidation segment. The continued strength of the euro is likely
to have a modest positive impact on gross margin in 2008.
Further, positive gross margin developments in all segments
are expected to moderate during the course of 2008, mainly as
a result of higher raw material prices, increased freight rates
and higher labor costs.
2008 PRODUCT LAUNCH SCHEDULE
Product Brand Launch Date
Predator® PowerSwerve football boot adidas Nov. 2007
adiPure football boot adidas Dec. 2007
UEFA EURO 2008™ Match Ball, EUROPASS adidas Dec. 2007
adiSTAR Control 4 running shoe adidas Jan.
adidas Originals “Handbags For Feet” collection adidas Jan.
adidas Originals Denim by Diesel apparel collection adidas Feb.
Stella McCartney “Golf” apparel collection adidas Feb.
adidas Originals “adidas Grün” collection adidas Mar.
adiZero CS running shoe adidas Mar.
F50 TUNiT™ football boot adidas Mar.
miCoach training system adidas Mar. / Apr.
Women’s Yatra training collection adidas Jul.
adiSTAR Revolt running shoe adidas Sep.
Team Signature Creator basketball shoe adidas Oct.
Men’s training adidas TECHFIT™ POWERWEB adidas Dec.
Freestyle Cities Collection Reebok throughout
2008
Avon Pink Ribbon collection Reebok Jan. / Feb.
Hex Ride Rally running shoe Reebok Feb.
KFS Sprintfi t II Pro football boot Reebok Feb. – Jul.
Vince Young Electrify SD (American football boot) Reebok May
Voltron Men’s footwear collection Reebok Jun.
Premier Verona KFS running shoe Reebok Jul.
Yao Pump Omni Hex Ride basketball shoe Reebok Aug.
Women’s American football apparel collection Reebok Aug. / Sep.
Big Papi 2M (baseball footwear) Reebok Oct.
Rbk OPS 7K Sickick Stick Reebok-CCM Hockey Nov. 2007
CCM Vector U+ Stick Reebok-CCM Hockey May
Rockport Signature Series Rockport Mar.
Tour Preferred® Red TaylorMade-adidas Golf Jan.
and Black balls
Burner® and Burner® TP balls TaylorMade-adidas Golf Jan.
TOUR360 LTD adidas Golf shoe TaylorMade-adidas Golf Feb.
TECHFIT™ POWERWEB TaylorMade-adidas Golf Mar.
adidas Golf apparel line
r7® CGB MAX Limited driver TaylorMade-adidas Golf Apr.
r7® CGB MAX Rescue hybrid TaylorMade-adidas Golf Apr.
Tour Burner® TP driver TaylorMade-adidas Golf Apr.
Tour Burner® iron TaylorMade-adidas Golf Apr.
OPERATING EXPENSES TO INCREASE In 2008, Group operating
expenses as a percentage of sales are expected to be higher
than in the prior year, as a result of increases in all three
brand segments. This mainly refl ects increases in the marketing
work ing budget as a percentage of sales at both adidas and
Reebok. Operating overhead costs as a percentage of sales are
expected to increase modestly in all brand segments.
MARKETING WORKING BUDGET TO INCREASE Group market-
ing working budget as a percentage of sales is expected to
increase in 2008. Marketing expenses at brand adidas are fore-
casted to increase mainly in conjunction with the major 2008
sporting events: the UEFA EURO 2008™ and the Beijing 2008
Olympic Games. Reebok’s marketing working budget is fore-
casted to grow as a result of the launch of Reebok’s new 2008
brand campaign “Your Move”.  see Reebok Products and Campaigns,
p. 138 The marketing working budget at TaylorMade-adidas Golf
is expected to remain stable as a percentage of sales in 2008.