Major developments in FY 2016:
In the fourth quarter of 2016, the company’s gross margin increased 1.6 percentage points to 48.8% (2015: 47.2%), as a more favourable pricing, product and channel mix as well as lower input costs more than offset the negative effects from currency headwinds. Other operating expenses as a percentage of sales increased 1.5 percentage points to 50.1% (2015: 48.6%), driven by higher operating overhead costs as a percentage of sales, also reflecting one-time costs associated with restructuring measures at Reebok. Operating profit improved to € 23 million (2015: operating loss of € 7 million, excluding goodwill impairment losses), translating into an operating margin of 0.5% (2015: negative operating margin of 0.2%). The company recorded a net loss from continuing operations of € 9 million in the fourth quarter (2015: € 17 million).
Basic earnings per share from continuing and discontinued operations were negative € 0.05 in 2016 (2015: negative € 0.14).
In 2017, the gross margin is forecasted to increase up to 0.5 percentage points to a level of up to 49.1% (2016: 48.6%). This, together with a forecasted decline in other operating expenses as a percentage of sales, is expected to drive an increase in operating profit of between 18% and 20%. As a result, the company’s operating margin is expected to improve between 0.6 and 0.8 percentage points to a level between 8.3% and 8.5% (2016: 7.7%). Net income from continuing operations is projected to increase at a rate between 18% and 20% to a level between € 1.200 billion and € 1.225 billion (2016: € 1.019 billion).