Reebok 2011 Annual Report Download - page 169

adidas Group
2011 Annual Report
GROUP MANAGEMENT REPORT – FINANCIAL REVIEW
165
2011
03.5 Subsequent Events and Outlook
Currency-neutral Wholesale revenues expected to
increase at a mid-single-digit rate
We project currency-neutral Wholesale segment revenues to increase
at a mid-single-digit rate compared to the prior year. Our growth expec-
tations are supported by order backlog development, positive retailer
and trade show feedback as well as the positive impact from the major
sporting events. Currency-neutral adidas Sport Performance sales
are forecasted to increase at a low- to mid-single-digit rate due to
growth in most categories, particularly football, running and training.
adidas Sport Style revenues are projected to increase at a high-single-
to low-double-digit rate on a currency-neutral basis as a result of the
expanded distribution scope and continued momentum in our product
lines, in particular adidas Originals. Currency-neutral Reebok sales
are expected to decrease due to the negative impact from the discon-
tinuation of the NFL licence agreement, and the shift of the US-related
NHL licensed apparel business to the Reebok-CCM Hockey segment,
beginning in 2012.
Retail sales to increase at a low-teens rate on a
currency-neutral basis
adidas Group currency-neutral Retail segment sales are projected to
grow at a low-teens rate in 2012. Expansion of the Group’s own-retail
store base and comparable store sales are expected to contribute at a
similar rate to the revenue growth. The Group expects a net increase
of its store base by around 100 to 150 adidas and Reebok stores in
2012. We plan to open around 250 new stores, depending on the
availability of desired locations. New stores will primarily be located in
emerging markets in Eastern Europe. Approximately 100 to 150 stores
will be closed over the course of the year. Around 180 stores will be
remodelled. Comparable store sales are expected to increase at a
mid- to high-single-digit rate compared to the prior year. As a result
of the improvements in concept store operations, we project concept
store growth rates to be slightly better than those of factory outlets.
Currency-neutral sales of Other Businesses to grow at a
low- to mid-single-digit rate
In 2012, revenues of Other Businesses are expected to increase at a
low- to mid-single-digit rate on a currency-neutral basis. TaylorMade-
adidas Golf currency-neutral sales are projected to grow at a low- to
mid-single-digit rate compared to the prior year. Despite sluggish
trends in the global golf market, the segment’s sales development
should be positively impacted by product innovation in core categories
such as metalwoods, irons and wedges. Revenues at Rockport are
forecasted to increase at a high-single-digit rate as a result of improve-
ments in the brand’s product portfolio and own-retail expansion. Sales
at Reebok-CCM Hockey are expected to grow at a strong double-digit
rate. This development mainly reflects the shift of the US-related NHL
licensed apparel business from the Wholesale and Retail segments
to the Reebok-CCM Hockey segment beginning on January 1, 2012.
01 adidas Group 2012 outlook
Currency-neutral sales development (in %):
adidas Group mid- to high-single-digit increase
Wholesale mid-single-digit increase
Retail low-teens increase
Comparable store sales mid- to high-single-digit increase
Other Businesses low- to mid-single-digit increase
TaylorMade-adidas Golf low- to mid-single-digit increase
Rockport high-single-digit increase
Reebok-CCM Hockey strong double-digit increase
Gross margin around 47.5%
Operating margin approaching 8.0%
Earnings per share € 3.52 to € 3.68
Average operating working capital as a percentage of sales moderate increase
Capital expenditure € 400 million to € 450 million
Store base net increase by around 100 to 150 stores
Gross borrowings decline