Reebok 2008 Annual Report Download - page 105

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adidas Group Annual Report 2008 101
adidas gross margin by quarter
in %
Q1 2007
Q1 2008
47.2
49.0
Q2 2007
Q2 2008
46.1
48.3
Q3 2007
Q3 2008
49.3
49.8
Q4 2007
Q4 2008
46.4
47.0
adidas operating profi t by quarter
€ in millions
Q1 2007
Q1 2008
270
336
Q2 2007
Q2 2008
191
175
Q3 2007
Q3 2008
395
439
Q4 2007
Q4 2008
64
147
adidas own-retail stores
2008 2007
Total 1,332 1,003
Internet 5
Concession Corners 150
Factory Outlets 381
Sport Style Concept Stores 4
Originals Concept Stores 140
Sport Performance Concept Stores 652
2
142
317
83
459
Net other operating expenses and income stable
Net other operating expenses and income as a percent-
age of sales in the adidas segment remained stable at 35.6%
(2007: 35.6%). Despite higher marketing expenses related to
the UEFA EURO 2008™ and the Beijing 2008 Olympic Games,
marketing working budget as a percentage of net sales
decreased slightly compared to the prior year as a result of the
segment’s strong sales growth. In 2008, the adidas segment
had higher operating overhead costs as a percentage of sales,
mainly due to higher sales expenses in emerging markets
related to sales growth. In euro terms, net other operating
expenses and income grew 10% to € 2.784 billion in 2008 from
€ 2.530 billion in 2007.
Operating margin increases to 14.0%
In 2008, the adidas operating margin increased 1.1 percentage
points to 14.0% (2007: 12.9%). This development was in line
with Management’s initial expectation of an operating margin
improvement. The increase results from gross margin expan-
sion and stable net other operating expenses and income as
a percentage of sales. Operating profi t for the adidas segment
increased 19% to € 1.098 billion in 2008 versus € 920 million
during the same period in the prior year.