The management expects that the group will post a slight sales increase in Europe, where we understand that the Adidas brand has been losing market share to Nike, although Adidas is still very strong in countries like Germany and Italy. Sales in Europe, which represents close to 30 percent of the total turnover, grew by 5 percent in the first quarter of 2018 but remained nearly flat for the whole year, in spite of higher-than-average spending on marketing in the region. The European marketing budget was inflated by about €300 million to help fend off Nike's fierce efforts in the region, and Adidas' management indicated to investors that it may be prepared to reduce margins to keep up with the competition.

At €5,405 million for the year, Adidas' sales in Europe were off by one percent in reported euros. Reebok's currency-neutral sales declined by 3 percent in the region, with a mid-single-digit increase in Classics. In euros, they dropped by 4 percent to €480 million.

As indicated before, the main problem in Europe last year was an oversupply of Stan Smith and Superstar vintage shoes. To avoid discounting, Adidas reduced sales of these two styles by €500 million in the course of 2018 and began to introduce alternative lifestyle models, some of which have not been as successful as expected.

Many new styles are in the pipeline for 2019 in both the lifestyle and sports performance segments, with many re-editions of vintage styles and many new items due to come out under Adidas' successful Yeezy and Ultraboost franchises.

Thanks to its focus on profitability, the group's gross margin improved in Europe by 2.0 percentage points to 47.7 percent and the operating margin rose by 0.1 percentage points to a nice level of 20.0 percent. Similar policies were adopted in Emerging Markets, where sales were down by 3 percent last year overall in constant currencies.

The operating margin improved by 4.0 percentage points in Russia and the other CIS countries, where currency-neutral sales went up by one percent, as sales generated by the football World Cup more than offset the effect of more than 150 store closures. In euros, sales declined in the region by 7 percent to €446 million for the Adidas brand and by 18 percent to €149 million for Reebok.

The operating margin rose by 3.0 percentage points in Latin America, reaching 17.1 percent. Currency-neutral sales went up by 6 percent in the region, but the company took a big hit from currencies. In euros, sales were off by 13 percent to €1,463 million for the Adidas brand and by 27 percent to €171 million for Reebok.

The Adidas Group performed much better in North America and the Asia-Pacific region. Sales went up by 15 percent last year in both regions in local currencies, with Greater China sporting an increase of 23 percent. Sales declined in Canada, but they went up in the U.S. by 17 percent for the Adidas brand and by 2 percent for Reebok.

In reported terms, Adidas' sales increased by 11 percent to €4,277 million in North America. Reebok's sales declined by 5 percent to €411 million, due in part to the closure of unprofitable stores. The group's management confirmed that Dick's Sporting Goods has cancelled a licensing agreement for Reebok clothing, but pointed out that the big U.S. retailer has agreed to buy similar items directly from the group.

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In Asia-Pacific, Adidas grew by 16 percent and Reebok by 3 percent. In euros, Adidas' revenues increased by 12 percent to €6,805 million, while those of Reebok remained flat at €336 million.

The bottom line showed improved margins in North America, where the Adidas brand is now beginning to become more mainstream, after starting at the top of the market. The gross margin went up by 1.7 percentage points to 41.2 percent in the region, while the operating margin improved by 3.9 percentage points to 14.9 percent.

In Asia-Pacific, the gross margin grew by 0.5 percentage points to 56.2 percent, but the operating margin declined by 0.3 points to a still relatively high level of 32.7 percent.