Global Edition

First quarter results from TaylorMade-adidas

9.00am 7th May 2001 - Corporate

TaylorMade-adidas Golf has announced revenue of EUR 154 million ($145 million) for the first quarter of 2001. Revenue in the quarter represented an increase of 21% over the previous high first quarter revenue of EUR 127 million ($124 million) posted in 2000.

The revenue increase in the quarter was driven primarily by a 57% increase in the company’s sales of metal woods. Momentum in this product category was specifically driven by the success of the company’s 300 Series metal woods, introduced in late 2000.

The majority of the remaining revenue increase came from the company’s adidas Golf footwear line that grew by 47% over the first quarter of 2000 and from adidas Golf brand apparel that posted a 50% increase.

These gains were partially offset by a 13% decline in revenues from irons. The reduction in iron revenues was a result of not introducing the new 300 Series of irons until late in the first quarter of 2001 while first quarter 2000 revenues included revenues from both Firesole and SuperSteel products that had been sold throughout the quarter.

Gross margins in the first quarter of 2001 increased to 49.9% compared to 48.3% in the first quarter of 2000. The improvement in margins was primarily attributable to strength in the metal wood product line as well as continued improvements in the company’s manufacturing processes.

Internationally, Japan continued to grow at a strong rate and was a major contributor to the 60% growth in international revenues during the first quarter.

“We are pleased with the quarter’s progress toward our goal of becoming the No. 1 performance brand in golf,” said TaylorMade–adidas Golf president, Mark King. “The performance of our 300 Series metal woods at retail in the first quarter mirrored the success we saw on the PGA Tour with this product group in 2000. During the first quarter we have continued to see adoption of the 300 Series metal woods on the world-wide professional tours, culminating this past weekend, when TaylorMade metal woods were the No. 1 driver on the PGA, European PGA, Japanese PGA, and professional golf tours.

“Beyond the tour, we’ve seen an acceptance at the retail level as well,” King continued. “TaylorMade’s overall metal-wood market share at green-grass retailers doubled from Q1 2000 to Q1 2001 – a growth larger than any other manufacturer over that same period.

“The early sell-through statistics on our new 300 Series of irons is very encouraging and we are already seeing strengthening in our market share numbers for this important segment of the market,” continued King. “Our intention has been to reach market leadership in the premium metal-wood category and to build on that momentum with the launch of our 300 Series irons. We are confident that we are on track in the second quarter of the year to produce substantial gains in market share for TaylorMade in the iron category.

“We, like all golf manufacturers, have seen some signs of softness in the US golf market during the early months of 2001. We are pleased that we have been able to increase our sales, strengthen our market share and solidify our operating processes during this challenging time. The benefit we derive from the broad strength of the combined TaylorMade and adidas Golf product lines has allowed us to continue to invest aggressively into new products and marketing initiatives during a period when many of our competitors have been forced to retrench.”

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