In 2019, adidas recorded strong operational and financial improvements. Revenues increased 6% on a currency-neutral basis, reflecting high-single-digit growth at the adidas brand and a low-single-digit sales increase at Reebok. All major market segments recorded currency-neutral sales increases. The gross margin increased 0.2 percentage points to 52.0%. Other operating expenses as a percentage of sales were down 0.2 percentage points to 41.6%, predominantly driven by lower as a percentage of sales. The company’s operating margin increased 0.4 percentage points to 11.3%, reflecting both the gross margin increase and the decrease in other operating expenses as a percentage of sales. Net income from continuing operations increased 12% to expenditure€ 1.918 billion, including the negative impact from the first-time application of IFRS 16. This translates into basic EPS from continuing operations of € 9.70, representing an increase of 15% versus the prior year period.
Expenditure that relates to point-of-sale and marketing investments. While point-of-sale investments include expenses for advertising and promotion initiatives at the point of sale as well as store fittings and furniture, marketing investments relate to sponsorship contracts with teams and individual athletes as well as to advertising, events and other communication activities. Marketing overhead expenses are not included in marketing expenditure.