Footwear Insight - Business Report Quarterly

Sales: Currency-neutral sales rose 8% to the equivalent of $5.98 billion with growth in all regions except for North America where period revenues dipped 4% to the equivalent of $1.21 billion. DTC (+20%), E-commerce (+34%), and Wholesale (+2%) each posted improved sales results. Footwear sales increased by 13%, driven by Originals and soccer. Lifestyle footwear sales jumped by double digits, fueled by demand for the Samba, Gazelle, Spezial and Campus fran-chises. Apparel, +2% despite high inventory levels in North America that prompted a lower sell-in rate into the wholesale channel. Operating profit: €336 million ($363 million) versus €60 million in the year- ago quarter. Gross margin: +640 basis points to 51.2%, reflecting healthier inventory levels, less discount-ing, lower sourcing costs, and a more favorable mix. Inventories were down 22% year-over- year. Key developments: Senior management expressed confidence in late April that North American sales will turn positive in H2/24, especially since Q1 end market inventories were down 41% year-over- year. Has launched the Supernova Rise for the run specialty channel but sees most current momentum generated by its lifestyle offering, including the new SL72. Sales: +14.3% for Q1 ended March 31, to ¥174,102 million ($1.08 billion). Global performance running sales jumped 12.8% to ¥87,894 million ($588.9m). North American sales improved 27% to ¥33,077 million ($221.6 million) as the region returned to modest profitability at ¥3,475 million ($23.3 million). Operating profit: +53% to ¥33,812 million ($226.5 million). Gross margin: +400 basis points to 54.5% from 50.5% in the year-ago period. Key developments: e Japanese group generated double-digit operating income improvement in all regions and higher sales in four of five. Sales: +23% in euros to the equivalent of $522.6 million in Q2 ended March 31. DTC sales increased by 18% in euros to the equivalent of $128.1 million and were up by 20% in the B2B segment to $394.2 million. Americas' Q2 revenues grew 21% to $275.8 million as average selling price (ASP) expanded and sell-in of premium and closed-toe styles continued to improve. Operating profit: +28% in euros to approximately $143.9 million. Gross margin: Declined by 320 basis points to 56.3% due to the temporary impact of production capacity expansion and planned wage and one-time bonuses for employees. Key developments: Eyeing 20% constant- currency sales growth for the FY ending A s we take a deeper look at the performance of brands in Q2, we find that a dozen footwear companies, ranging from Adidas to Wolverine Worldwide and Asian footwear manufacturer Yue Yuen, generated an aggregate sales increase of 2 percent year-over-year to more than $29.4 billion with the combo of Nike and Adidas accounting for 62.5 percent of the total. On Running had the largest quarterly sales gain at 25 percent. Allbirds and Wolverine, which did not count the revenues of divested businesses, brought up the rear. On the profitability side, Q2 increased by 18 percent for the 12 companies to more than $2.3 billion with Nike accounting for 51% of the total and On with the biggest percentage increase. But the Adidas Group had the biggest profitability turnaround from a year-ago loss. n 12 Footwear Insight Business Report Quarterly ~ Q2 July 8 2024 footwearinsight.com BRAND & RETAIL SCORECARD Q2 QUARTER 2 ENDING 6/24/24

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