Reebok 2014 Annual Report Download - page 143

Group Management Report – Financial Review
139
2014
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03.3
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adidas Group
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2014 Annual Report
Business Performance by Segment
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Retail Business Performance
Retail Business Performance
Retail full year results
In 2014, Retail revenues increased 21% on a currency-neutral basis as a result of double-digit sales
growth at both adidas and Reebok. Concept stores, factory outlets and concession corners were all
up at double-digit rates versus the prior year. eCommerce grew 72% on a currency-neutral basis.
Currency translation effects negatively impacted segmental revenues in euro terms. Sales grew
11% to € 3.842 billion from € 3.446 billion in the prior year. Currency-neutral comparable store
sales increased 9% versus the prior year, as a result of sales growth across all store formats as
well as all regions.
Retail gross profit rose 6% to € 2.281 billion from € 2.143 billion in 2013. Gross margin in the Retail
segment decreased 2.8 percentage points to 59.4% from 62.2% in 2013. The positive effect from a
more favourable product mix was more than offset by a less favourable pricing mix. In particular, the
devaluation of the Russian rouble versus the euro and the US dollar was a major headwind in 2014.
By brand, the adidas retail gross margin was down 2.8 percentage points to 60.3% (2013: 63.1%),
while Reebok’s retail gross margin decreased 3.3 percentage points to 54.1% (2013: 57.4%).
Segmental operating expenses in Retail primarily relate to personnel and rent expenses as well as
the sales working budget. In 2014, segmental operating expenses increased 10% to € 1.608 billion
from € 1.465 billion in 2013. This was mainly a result of higher expenses related to the expansion
of the Group’s store base, particularly in emerging markets. Higher sales working budget expenses
also contributed to this development. Segmental operating expenses as a percentage of sales
decreased 0.7 percentage points to 41.8% (2013: 42.5%).
see Glossary, p. 258
see Table 08
see Glossary, p. 258
see Table 08
08
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Retail at a glance (€ in millions)
2014 2013 Change
Net sales 3,842 3,446 11%
Gross profit 2,281 2,143 6%
Gross margin 59.4% 62.2% (2.8pp)
Segmental operating profit 673 678 (1%)
Segmental operating margin 17.5% 19.7% (2.1pp)
09
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Retail net sales by region (€ in millions)
2014 2013 Change Change
(currency-
neutral)
Western Europe 673 545 23% 23%
European Emerging Markets 1,284 1,297 (1%) 18%
North America 732 639 15% 15%
Greater China 270 216 25% 26%
Other Asian Markets 463 406 14% 19%
Latin America 419 344 22% 39%
Total 1) 3,842 3,446 11% 21%
1) Rounding differences may arise in totals.