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## Results of Operations 

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## Gross Profit Margin Sets New Record 

The gross profit margin is a particularly important indicator of the company’s positive development. As a percentage of sales, the margin in the 2004 reporting year climbed to a new record high of 51.9%, up from the previous year’s level of 48.7%. This means 

an improvement of 320 basis points and a significant increase in comparison with the level projected at the beginning of the year. It was the highest gross profit margin in company history, which positions the company at the upper end of the margin spread within the sporting goods industry. In addition to the strong desirability of the brand, this development is also attrib- utable to favorable exchange rates, an beneficial product mix and an increased share of company-owned retail operations. 

In absolute figures, gross profit was up by a total of 28.1%, rising from € 620.0 million to € 794 million. 

The margin in Footwear climbed from 49.5% to 53.1%, Apparel showed an improvement from 47.1% to 49.7% and Accessories reported a margin of 49.6% compared to 46.6% in the previous year. 

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Regional development was as follows: In Europe, the gross profit margin rose from 51.3% to 54.1%, in the Americas from 44.6% to 49.3%, in Asia/Pacific from 44.4% to 48.1%, and in Africa/Middle East from 27.4% to 34.4%. 

