Good day. Welcome to the adidas Group conference call for the first half year 2015 financial results. Today's conference is being recorded. At this time, I would like to turn the conference over to Sebastian Steffen. Please go ahead, sir.
Thank you very much, Tali, and good afternoon, ladies and gentlemen, and welcome to our first half 2015 financial results conference call. Our presenters today are Herbert Hainer, the adidas Group CEO, and Robin Stalker, the Group CFO. As always, to allow for ease of comparison, all sales and revenue-related growth rates will be discussed on a currency-neutral basis unless otherwise specified. In addition, all figures will refer to the Group's continuing activities due to the divestiture of the Rockport business segment. Lastly, all figures will be discussed excluding goodwill impairment, losses, unless otherwise stated. As you know, we have a lot of topics to cover today. Without any further ado, over to you, Herbert.
Thanks, Sebastian, and good afternoon, ladies and gentlemen. When we introduced our new strategy, Creating the New, at the end of March, we told you that it will take time to see all of our investments paying off and the full benefits coming through. We also promised you that this new approach, together with our fresh organizational setup, will show first positive results already this year. The second quarter is, without any doubt, a proof positive for that. I'm really pleased to see how well adidas and Reebok are resonating with their respective consumers, which is clearly reflected in their second quarter performance. Reebok, with its 6% top-line improvement, now has nine consecutive quarters of growth in the books.
After a very successful start to the year in Q1, adidas grew a strong 8% in the second quarter, which is even more impressive considering the record World Cup-related sales we were comparing against. This is also reflected in the praise key adidas products, such as Boost, our new football silos, Ace and X, the Superstar, and Kanye West's Yeezys, have received from sneakerheads as well as vertical sports and lifestyle media around the world. I will come back to these success stories in more detail during today's presentation. In addition, there were a lot of other areas where we made some major progress over the last couple of months. Last week, for example, we completed the divestiture of Rockport, which will allow us to focus our resources on our core competency, sport, and on the highest potential opportunities for our Group to drive sustainable and profitable growth.
Yesterday evening after market close, we announced the acquisition of Runtastic, an Austrian-based health and fitness app company, helping us to further strengthen our digital activities. In June, we finished the second branch of our share buyback program. Only nine months after launching our shareholder return program, we have already concluded 40% of the total EUR 1.5 billion that we intend to distribute to our shareholders. Unfortunately, there is also one area that is still not performing according to our expectations. Clearly, the business development at TaylorMade-adidas Golf has not lived up to our initial projections over the last couple of months.
While we are, of course, going to provide you with more details on the other topics that I mentioned before, let me start elaborating on the challenges which we are facing with our golf business and what we are doing to change it for the better. 2014, as you will remember, was a very tough year for the golf industry in general, and this overall weakness hit us as market leader particularly hard. After we had taken some painful measures to resize our business and postpone most product launches to pave the way for a healthier retail environment, we expected the market and our business to return to growth this year. While the number of rounds being played reversed their downward trends recently, suggesting that the overall environment has indeed improved somewhat, the situation at the point of sale remains more challenging than we had initially projected.
At the same time, our two major product introductions, the R15 and the AeroBurner, did not resonate as well with the golf consumer as we would have hoped. As a result of these developments, our sell-through rates were not as strong as expected, leading to earlier and more pronounced promotional activity, which is clearly reflected in the 26% top-line decline during the second quarter, as well as significant margin pressure. I know this development is disappointing for you, but rest assured that we as a management team are just as disappointed about these developments as you are. The current performance has shown that we need to go much deeper in order to bring TaylorMade-adidas Golf back on track. This is exactly why we will make every effort to develop the right measures to drive the turnaround of our golf business.
To support us in this, we have engaged with an investment bank for the purpose of analyzing future options for our golf business, in particular, the Adams and the Ashworth brands. We are, of course, not going to wait for these results before starting to react to the challenges. In fact, over the last few weeks, we have not only developed a major turnaround plan, we have also already started to implement it, as we are fully aware that we don't have any time to lose. The major cornerstones of the plan that goes way beyond our initiatives from last year are the following. Firstly, we will enhance TaylorMade's pricing, promotion, and trade patterns. This includes maximizing list prices on future launches. In the past, our pricing has too often been driven by historical levels rather than robust consumer research and in-depth analysis to test price point decisions.
As a result of that, TaylorMade's core portfolio of drivers is priced below competitors' products, despite still being the clear market leader in metal woods. In addition, we have to change our entire launch pattern, understand the optimal product life cycle, and ensure that the organization sticks to it. This way, we will improve the overall conditions for subsequent product releases, reduce the risk of excess inventory, and sharpen our perception in the eyes of both consumers and retail partners. Another area that we are going to tackle more aggressively is TaylorMade-adidas Golf's supply chain and product expenses, which have increased over the last couple of years as a result of increases in labor cost and supply chain overheads.
By renegotiating contract manufacturing rates and selectively adjusting the products in terms of components, designs, and cosmetics, we will reduce input and conversion costs, which will drive a meaningful increase in the product margin across all categories. This, by the way, has immediate impact. For our next major metal wood launch alone, which is planned for September, we have already identified savings potential in the low single-digit million EUR range, and this is for one single product only. Just imagine the potential we have when applying this approach to all future launches across all product categories. Other initiatives in this area will include measures to increase productivity in club assembly and ball manufacturing, and the complete elimination of air freight to ship our product. We will reprioritize global marketing spend by significantly reducing investment in non-priority markets.
In addition, we will reduce our marketing investment by limiting product launch frequency, focusing our media spend on top-tier products, and sharpening our portfolio of players. In total, this will have an impact in a mid-double-digit million EUR range per year when in full swing. Last but not least, we will generate significant operating overhead savings. These strict cost-saving efforts will include a reduction of personnel expenses by reshaping the organization. In fact, we already began the process in July and rebalanced our workforce by 6% to immediately increase operational efficiency. This measure is a difficult yet necessary step in order to lead TaylorMade-adidas Golf into a successful future. Further initiatives aimed at reducing our core cost base are a consolidation of warehouses around the globe, the optimization of shipping policies with our retail partners, as well as the creation of shared service centers.
The implementation of all these measures continues as we speak. The outcome will enhance to be a nimbler, more creative, and profitable company. When talking about our golf business, you should also keep in mind one thing. Even in this challenging market, our footwear and apparel business with adidas Golf grew in the first half and continues to deliver solid returns. To me, this is a clear testament to the strong position adidas enjoys in sport. Robin will speak about our outlook for the full year in more detail a little later, but let me make one point very clear. The weaker than expected performance of TaylorMade-adidas Golf will not put the group's top and bottom line guidance for 2015 at risk. TaylorMade-adidas Golf is a small part of our business, and as mentioned before, momentum at our core brands, adidas and Reebok, is exceeding our initial expectations.
Our commitment to achieving a mid-single digit top-line improvement and to increasing the bottom line between 7% and 10% stands firm, and I have absolutely no doubt that we will achieve these goals that we had communicated at the beginning of the year. We will now take a more detailed look at the group's overall performance during the second quarter, you will see why I am so optimistic going into the second half of the year. The key financial results of the second quarter were as follows. Sales were up a robust 5%. In EUR terms, sales were even up an impressive 15%, an increase by more than EUR 500 million to EUR 3.9 billion. We recorded another quarter with strong growth at adidas and Reebok, as revenues increased 8% and 6% respectively. The gross margin decreased 0.9 percentage points to 48.3%.
While higher input costs and negative currency effects also played a role here, more than half of the decline is due to lower product margins at TaylorMade-adidas Golf. Operating margin was down 40 basis points to 6.0%, a direct consequence of the gross margin decline. The net income from continuing operations improved 2% to EUR 146 million. As always, while Robin will discuss the financials in more detail in a few minutes, let me have a closer look at our brand performance during the second quarter and first half respectively. Overall, there is no doubt that the adidas and the Reebok brands had an excellent second quarter. The strong Q2 performance is even more impressive considering the difficult comparison the adidas brand faced due to the non-recurrence of the very strong FIFA 2014 World Cup-related revenues generated in the second quarter of last year.
In this regard, of particular note is the double-digit sales increase we've witnessed in Western Europe and Greater China, these two markets had already seen double-digit growth rates in the prior year period. Let me remind you, ladies and gentlemen, that Western Europe was a key improvement area for us 18 months ago. The second quarter results now clearly show that our efforts in our home territory are paying off. In one word on China, there was a lot of noise about the future economic development of this huge marketplace recently. For our sector, we clearly don't see an end of the China growth story. Instead, more and more Chinese consumers are attracted by sport and the sporting lifestyle, and they are willing to spend on strong international brands such as ours.
Talking about strong growth rates, the performance in Latin America during the second quarter has also exceeded our initial expectations. Here as well, we have to take into account that the 2014 FIFA World Cup took place in Brazil, right in the heart of this region. In addition, we should not forget that Latin America is currently facing some bigger macroeconomic uncertainties. Turning to the categories, revenues in the running category increased 2% during the second quarter and 7% year-to-date, driven by double-digit sales growth in apparel and mid-single-digit increases in footwear. The latter was strongly supported by the successful launch of the UltraBOOST, the greatest running shoe of all time. Feedback we are receiving from both our consumers and our key retail partners is overwhelming.
In particular, the all-white version of the UltraBOOST was named as the best all-white sneaker of 2015 in several sneaker blogs and sold out in just three days. Overall, we sold more than five million pairs of Boost in the running category during the first six months, and there is no doubt we remain fully on track to sell 11 million pairs of Boost running shoes by the end of 2015. We are very satisfied with the development of our Boost franchise, and I definitely do believe that the best is yet to come. In the football category, sales declined in both the second quarter and in the first half, mainly as a result of tough comparisons from the surge in World Cup-related apparel sales last year.
On the football footwear side, however, sales during the second quarter increased a strong 17%, supported by the highly anticipated and very successful introduction of our new football footwear franchises, Ace and X, which are featured in the new Be the Difference football reset campaign. We unveiled Ace and X during the UEFA Champions League final in Berlin, where we have also opened the Berlin Base, our first urban football center. The Base is set to become the next must-visit spot for our football consumers in Germany, and we will utilize the venue as an open-source location for upcoming football players to get involved in projects such as the testing and development of unreleased products. In training, sales increased 6% and 7% for the second quarter and the first half, respectively driven by high single-digit growth in the apparel business.
In particular, our women's apparel business recorded solid growth during the first half of 2015 with our StellaSport collection resonating extremely well with female consumers and retail partners alike. At adidas Originals, the strong performance from the first quarter even accelerated in Q2, with revenues increasing 37% during this three-month period. During the first six months, revenues were up 33% versus the prior year period. The adidas Superstar in general and the Supercolor collection by Pharrell Williams, in particular, are resonating tremendously with the lifestyle consumer. Consequently, sell-through rates spiked across all channels across the globe, creating halo effects far beyond the product itself. During the second quarter, we also launched the Yeezy Boost 350, our second shoe developed in collaboration with Kanye West.
The hype around this launch exceeded even our own expectations, as sneakerheads around the globe formed long queues in front of our stores to be amongst the lucky ones to buy a pair of this outstanding franchise. Shoe, which literally sold out in minutes, went for as much as $10,000 on eBay. Let's not forget the huge successes around the other adidas Originals franchises such as the ZX Flux, the Stan Smith, or the Tubular, which continue to do extremely well. adidas Originals is a great success story that is set to continue. At the same time, you can rest assured that we will be very careful and make sure we limit the availability of the product to prevent the sub-brand from overheating.
At adidas NEO, the momentum we are seeing is just as strong as at the adidas Originals, with sales growth also accelerating compared to the first quarter. Revenues at adidas NEO grew 43% during the second quarter and 29% in the first half, driven by strong double-digit sales growth in most markets. Revenues in both footwear and apparel increased at strong double-digit rates, supported by the Selena Gomez summer collection, which again delivered huge engagement levels and activation amongst young fashion consumers. Moving over to Reebok, where the positive trends from the previous quarters continued throughout the second quarter, with revenue up 6% for the quarter and 8% for the first six months. As mentioned before, the second quarter represents the ninth consecutive quarter of growth, a clear testimony that the brand is resonating well with the fit generation.
With the exception of North America and Russia/CIS, sales increased strongly in all markets, especially in emerging markets such as Greater China, Latin America, and MEA, where sales grew at strong double-digit rates each. From a category perspective, Reebok's growth is directly linked to key fitness categories with strong growth in the important training, running, and studio categories. Classics also continues to show robust momentum, supported by the launch of the Ventilator Day-Glo campaign, featuring U.S. hip hop superstar Kendrick Lamar. With that, ladies and gentlemen, let me now hand you over to Robin to take a closer look at the individual market performance and walk you through the financials.
Great. Thanks very much, Herbert. Good afternoon from my side, ladies and gentlemen. As Herbert's just mentioned, the adidas and Reebok brands continue to enjoy strong momentum across the globe. My comments today will therefore mainly focus on how our business developed from a market segment perspective, how this ultimately impacted our financial results throughout the various P&L items. Let's turn to Western Europe first, where both adidas and Reebok were able to maintain the strong momentum from the beginning of the year. Despite challenging World Cup comparisons, sales grew by 12% in the second quarter, on top of a 14% increase in Q2 last year. adidas' strong double-digit increases at Originals and NEO were able to more than offset the non-recurrence of prior year World Cup-related revenues, leading to an increase of 12%.
At Reebok, where sales grew 9%, the increase was driven by growth in nearly all categories, with Reebok's core categories, Training and Studio, being particularly strong during the second quarter, growing at double-digit rates each. From a market perspective, the main contributors to the sales increase were the U.K., France, Italy, and Spain, with revenues growing at double-digit rates each. The strong performance during the second quarter also lifted revenues for the first half, up 12% versus the prior year period, with double-digit increases at both adidas and Reebok. Sales in North America remained stable during the second quarter, as sales growth at adidas was offset by declines at Reebok. adidas revenues increased 2%, driven by double-digit growth at Originals and significant increases at NEO, where revenues more than doubled. Excluding the World Cup effect in 2014, adidas sales grew at a mid-single-digit rate in the second quarter.
Reebok revenues were down 9% during the second quarter, as high single-digit growth in the Training category was more than offset by sales declines in the Walking category and in Classics. In addition, Reebok continues to be negatively impacted by the process of streamlining the brand's own retail activities in North America. Despite further increases in the segment's sales and marketing working budget, in order to gain relevance in the marketplace and increase our visibility, we were able to achieve our goal of leading North America back into profitable territory. This development was supported by a 0.4 percentage points increase in gross margin, as we were able to offset a less favorable product mix, once again caused by the impact from last year's World Cup, by a more favorable pricing mix.
Moving over to Greater China, where trends in the sporting goods industry, and for the adidas and Reebok brands in particular, remain very healthy. Our second quarter performance is nothing but proof of that. Sales in the second quarter were up 19% as a result of a 19% increase at adidas and a 57% growth at Reebok. Growth at adidas was mainly due to double-digit increases in the Training and Running categories, as well as at Originals and NEO. The sales increase at Reebok was driven by significant growth in Classics, where revenues more than doubled. As a consequence, revenues in Greater China were up a strong 20% during the first half of 2015 compared to the prior year period, with double-digit increases at both adidas and Reebok.
In Russia/CIS, in line with our expectations, the second quarter performance was significantly impacted by the low levels of consumer confidence and consumer spending, putting pressure on the market's overall economic activity. As a result, revenues in the second quarter decreased 14%, with sales declines at both adidas and Reebok. While sales at adidas decreased 16% due to declines in most categories, revenues at Reebok were down 8%, mainly due to double-digit sales decreases in the Running and Walking categories, as well as in Classics. Top-line development during the second quarter was also negatively impacted by the further rationalization of the segment's own retail store network, with 64 net store closures during the second quarter. Since the start of the year, we have closed a total of 92 stores net in the market, representing close to 10% of the Russia/CIS total store count.
This in turn has helped us bring operating expenses down by 27% during the second quarter, as we remain focused on further reducing operating overhead costs, predominantly in the form of sales expenditure and lease payment. Going into the second half of the year, there is no doubt that we will continue to do what it takes to safeguard this segment's profitability in 2015. The agile nature of our business model gives us exactly the operational flexibility we need to have in order to win this challenge. Revenues in Latin America improved a strong 9% in the second quarter, on top of a 33% increase from the prior year period, as revenues at adidas were up 7% and Reebok sales increased 22%.
Growth at adidas was supported by double-digit sales increases in the Training category, at adidas Originals and at adidas NEO, as well as a high single-digit improvement in Running. Sales increases at Reebok were driven by double-digit sales growth in the Running, Training, and Walking categories, as well as in Classics. From a market perspective, the segment's top-line development was driven by double-digit sales growth in Argentina, Chile, and Peru. As a result of the strong second quarter performance, revenues in Latin America for the first six months grew 8%, with brand adidas up 6% and Reebok up 19% respectively. In Japan, sales in the second quarter decreased 6%, while revenues of Reebok grew 27% during the quarter, driven by significant growth in the Running category, as well as in Classics. Sales at adidas were down 8%.
The sales decline at adidas was mainly due to double-digit decreases in the Training and Football categories, with the latter once again reflecting the non-recurrence of World Cup-related revenues. Excluding the positive World Cup effects in the prior year period, adidas brand revenues in Japan grew at a low single-digit rate during the second quarter. Looking at the first half performance, revenues in Japan were down 1%, as growth at Reebok was more than offset by the sales declines at adidas. In MEA, we continue to see robust momentum, with sales up 16% in the second quarter and 12% during the first half, as both adidas and Reebok grew at double-digit rates. While sales at adidas increased 14% in Q2, mainly as a result of double-digit sales increases in the Training and Running categories, as well as at adidas Originals and adidas NEO.
Reebok revenues grew 23%, driven by double-digit sales increases in the Training and Running categories. From a market perspective, the main contributors to the segment sales increases were the United Arab Emirates, South Korea, Turkey, and India. To finish on the segments, let me spend a minute on other businesses. Herbert has talked a lot about the current challenges TaylorMade-adidas Golf is facing, and it should not come as a surprise that those challenges have also had a meaningful impact on the overall performance of other businesses in both the second quarter, as well as the first half. Revenues of other businesses were down 14% in the second quarter, or 8% in the first half, as double-digit sales growth at Reebok-CCM Hockey and other centrally managed businesses was more than offset by the significant decline at TaylorMade-adidas Golf.
Gross margin of other businesses decreased 5.9 percentage points in the second quarter to 30.8%, or 3.2 percentage points in the first half to 34.2%, due to significantly lower product margins at TaylorMade-adidas Golf. Consequently, other businesses recorded an operating loss of EUR 40 million during the second quarter, compared to an operating profit of EUR 2 million in the prior year period. As a result, the operating margin for other businesses decreased from 0.6% in the previous year to a negative 10.9% in the second quarter of 2015. For the first half, other businesses recorded a negative operating margin of 6.1%, compared to a negative operating margin of 2.7% in the first six months of last year. Turning now to our group performance and starting with the P&L.
Our group gross margin decreased 90 basis points in the second quarter to 48.3%, or 40 basis points in the first six months to 48.8%. The gross margin development during the second quarter was primarily impacted by lower product margins at TaylorMade-adidas Golf, caused by ongoing promotional activity in the marketplace. In addition, the devaluation of several emerging market currencies year-over-year, in particular the Russian ruble, as well as the unfavorable development of input costs as a result of the increase in labor costs, weighed on the group's gross margin, more than offsetting the positive effects from a more favorable pricing and channel mix. Moving over to operating expenses, which increased 13% in the second quarter, or 14% in the first six months, partly due to negative currency effects.
The increase in operating expenses mainly reflects higher Sales and Marketing Working Budget investments, which grew 9% and 17% for the second quarter and the first half, respectively. Let me make it very clear that we remain fully committed to further invest in our brand, targeting even stronger brand visibility and desirability towards our consumers. As a percentage of sales, other operating expenses were down 0.6 percentage points and 0.7 percentage points, respectively. Sales and Marketing Working Budget investments as a percentage of sales decreased 70 basis points to 14.0% for the second quarter and were up 10 basis points to 13.8% for the first half. Reflecting the group's top-line expansion and the operating leverage we achieved, the group's operating profit increased 14% to EUR 596 million in the first six months of 2015.
This translates into an operating margin of 7.5%, down 20 basis points versus the prior year. Turning to the non-operating items of the P&L. In the first half of 2015, net financial expenses decreased to EUR 9 million versus EUR 28 million in the prior year. This development was due to positive exchange rate variances, as well as the non-recurrence of negative exchange rate effects from the prior year. The first half tax rate increased 290 basis points to 31.8%, mainly due to the non-recognition of deferred tax assets related to TaylorMade-adidas Golf, for which the realization of the related tax benefit is not considered probable. Net income from continuing operations, excluding goodwill impairment losses, increased 14% to EUR 401 million in the first half of 2015. This translates into basic and diluted earnings per share of EUR 1.96, up 17% compared to the prior year.
Looking specifically for a minute at the retail part of our business, revenue grew 8% in the second quarter and 11% for the first half. The strong performance during the first six months was mainly due to double-digit growth at adidas. Reebok revenues continue to grew at a low single-digit rate. Comparable store sales were down 2% during the second quarter due to the difficult trading environment in Russia/CIS, given the overall weakness in traffic and consumer sentiment. For the first half, comparable store sales were up 1%, with growth across all regions except Russia/CIS. By brand, adidas comp store sales grew 2%, while Reebok comp store sales were down 6%. Our e-commerce business continues to do extremely well, with sales up 56% in the second quarter, and also for the first half.
Retail gross margin increased to a strong 2.9 percentage points to 63.4% for the second quarter, and 1.5 percentage point to 61.8% in the first six months. While the devaluation of the Russian ruble negatively impacted these results, the positive effects from a more favorable product and pricing mix provided significant tailwinds to the overall retail gross margin development. As a result, the operating margin for our own retail operations was up 450 basis points to 23.3% during the second quarter, and up 370 basis points to 20.0% for the first half, benefiting from the increase in gross margins and leveraging lower operating expenses as a percentage of sales. In terms of our store development, at the end of the second quarter, we operated 2,846 stores, a net decrease of 67 stores versus 2,913 at the end of 2014.
Of the total number of stores, 1,582 were adidas and 422 were Reebok-branded. In addition, we operated 842 factory outlets. During the first half, we opened 112 new stores and closed 179 stores, while 39 stores were remodeled. Looking at the remainder of the year, we will continue to carefully manage our store base. We currently anticipate a net decrease of our store base of around 40 adidas and Reebok stores in 2015. While we plan to open around 270 new stores, depending on the availability of desired locations, approximately 310 stores will be closed over the course of the year, primarily in Russia/CIS. Around 100 stores will be remodeled. Finally, let me talk about our balance sheet and cash flow development.
At quarter end, operating working capital increased 8% as both inventories and accounts receivable grew on a currency-neutral basis, reflecting our expectations for growth in the coming quarters. As a percentage of sales, however, operating working capital decreased by 0.4 percentage points to 21.6% as operating working capital grew at a slower pace than the group's top line. As you know, on March 5th, we announced the commencement of the second tranche of our share buyback program. Within the second tranche until June 15, 2015, we bought back 4,129,627 shares, corresponding to 1.97% of the company's nominal capital. The average purchase price per share for the second tranche was EUR 72.65. The total number of shares bought back so far within the framework of the share buyback program amounts to 9,018,769 shares. This corresponds to 4.31% of the company's nominal capital.
As a result of the utilization of cash for the share buyback program, we ended the quarter with net borrowings of EUR 957 million compared to net borrowings of EUR 454 million a year ago, an increase obviously of EUR 503 million year-over-year. Consequently, the ratio of net borrowings to EBITDA increased to 0.6 versus 0.4 in 2014. Ladies and gentlemen, to wrap up, based on our robust financial performance during the first half of 2015 and considering the various initiatives that are upcoming in the second half of 2015, we are optimistic about our outlook for the remainder of the year, and we reconfirm our full year guidance for 2015. We continue to expect sales to increase at a mid-single-digit rate on a currency-neutral basis in 2015.
The group's top-line development will be driven by the ongoing robust momentum at both adidas and Reebok, in particular in markets such as Western Europe, Greater China and MEA, where revenues are now expected to grow at a double-digit rate each. This, as well as the further expansion and improvement of the group's controlled space initiatives, will more than offset the non-recurrence of sales related to the 2014 FIFA World Cup, as well as the continued weakness at TaylorMade-adidas Golf, where currency-neutral revenues are now forecast to decrease versus the prior year level. We continue to forecast gross margin to be at a level between 47.5% and 48.5%. As we expect improvements during the second half of the year as a result of a more favorable pricing and product mix at both adidas and Reebok, together with the more favorable channel mix.
Last, but certainly not least, we continue to anticipate net income from continuing operations to increase at a rate of 7% to 10%, thus outpacing the group's expected top-line development. With this in mind, let me hand back to Herbert, who will now give you more details on what to expect from the next quarters.
Thanks very much, Robin. Ladies and gentlemen, with the strong momentum at adidas and Reebok in mind, let me now share with you some of the initiatives which we are planning for the remainder of the year. There is no question at all that our product and marketing pipeline is just as loaded as it was during the first six months. I have already highlighted the introduction of our two new football franchises, Ace and X. Since these new boots hit the retail at the beginning of the third quarter, the reaction from both consumers and retailers is simply outstanding. As already communicated during our first IR tutorial workshop, we are seeing a double-digit increase in demand in our football footwear business based on exactly those franchises.
This is a clear proof point that the game of football is changing and that we are driving this change with the adidas football revolution. This proves, once again, the adidas brand is and will always be ahead of the game in football. While I am absolutely confident we will see Ace and X perform well on the pitch and bring our visibility to new heights, I'm equally excited to see Manchester United and Juventus Turin finally playing in three stripes, starting with the 2015/16 football season. Last Saturday, we reunited with Manchester United, one of the most popular and successful football teams in the world, and unveiled the new home jersey. The initial response has really blown us away, as it has exceeded all expectations in both the clubs and our own brand channels.
The Old Trafford Megastore saw record demand for a non-match day, almost 50% up on the previous record. The Man U e-com platform, United Direct, saw equally high demand, four times up on the previous record kit launch. The adidas brand is experiencing unprecedented demand in both our own stores and e-com channels, and our wholesale partners experienced the biggest ever launch day on Saturday. This success confirms again that Man United is not just a football club. With its more than 650 million fans globally, it is, without doubt, one of the world's most supported sports symbols. This special club has not only a rich history but also a reputation for success and the unexpected. We are immensely proud to be part of that history and to be returning, once again, as a partner.
To finish on football, earlier this morning, we introduced Create Your Own Game to support our newly launched products and partnerships, featuring some of the world's most admired football players, such as Lionel Messi, James Rodríguez, Gareth Bale, and Thomas Müller. In this third chapter of the adidas Sport 15 campaign, which underlines the brand's leadership and passion for sport, with a clear focus on football, we'll see a second part of the story being told in a separate spot that launches at the end of this month. I'm absolutely convinced that this campaign is going to resonate just as well with the football consumer as the ones before and will help us to further elevate the brand.
While I'm not able to share any details with you yet, just as a reminder, we are just 10 months away from the UEFA Euro 2016, so be prepared to see some major product launches towards the end of this year. As you know, North America is and remains the focus area for us, and our firm goal is to win the U.S. consumer by increasing credibility in U.S. sports. In this regard, winning the locker rooms is crucial for our future success. Therefore, I'm happy that just recently, we integrated our Primeknit technology into American football, as we have launched the new official uniforms with several universities. Amongst others, Arizona State, Nebraska, Miami, and UCLA. This is part of our overall efforts to lift our relevance towards the U.S. consumer, which is already paying off.
Over the last couple of months, we have increased our market share in American football by four percentage points. American football is just one example. We have also brought back the adidas brand to other U.S. sports. In baseball, we recently launched a complete new bat featuring the RocketBallz technology, which has already revolutionized performance in golf clubs and hockey sticks. The bat, which delivers the perfect mix of power, speed, and accuracy, has created quite a buzz for us since its launch in June. Further adding to our visibility in baseball is our improved roster of players. adidas athletes Kris Bryant, Dellin Betances, Mike Moustakas, and Justin Upton were named for this year's MLB All-Star Game. In particular, Kris Bryant, who took part in the MLB All-Star Game after having started his professional career just three months ago, is becoming the rock star in baseball.
At the age of 23, Bryant ties Chicago Cubs legend Ron Santo as the youngest All-Star in the franchise history. Currently, Kris ranks number 2 in the MLB in overall jersey sales and number 1 on fanatics.com in retail sales for the month of July. Last week, adidas and the Pac-12 Conference announced a three-year partnership that makes adidas the official athletic apparel and footwear partner of the conference and all Pac-12 championship events. The Pac-12, which consists of 12 colleges, including Arizona State and UCLA, hosts championship events in American football, basketball, cross country, swimming and diving, wrestling, golf, and other important college sport activities. This new partnership continues to highlight our commitment to the U.S. college sport and our focus on aligning with schools, teams, and student-athletes.
Pac-12's rich athletic and academic tradition and consistent success on and off the field makes them a perfect fit for the adidas family. We look forward to our brand appearing on field and on court starting this season. Now, allow me to switch to our game-changing Boost technology. Since its introduction back in 2013, the Boost technology has redefined the footwear industry. We started in running, and the success we are seeing is just as visible as the 53 major marathon wins with the adidas Boost. We have also integrated this great technology into other key categories such as basketball, training, baseball, golf, and tennis. To bring this great innovation even closer to our consumers, we will start creating interactive mobile experiences at premier U.S. running events by introducing the Boost Experience by adidas.
It is an interactive showroom celebrating adidas products and technologies with an objective to build awareness through education for the Boost technology. Taking runners beyond the traditional consumer journey the store experience offers. This space provides several unique touch points, including an interactive kinetic wall with Boost capsules that move in response to foot traffic or a try-on area where consumers can try on the latest adidas Boost footwear, such as the UltraBOOST. As you know, controlling our own destiny is absolutely crucial for our point-of-sale activation. We are fully committed to further increasing consumer experiences across the market. Our team in China has just opened the first sportswear collective store located in Chengdu. This newly opened 700 sq m of retail space is designed to bring consumers the most up-to-date sports trends that can easily be turned into everyday lifestyle wear.
Following our goal to further develop sports in China and encourage a passion for an active lifestyle, we are bringing the latest product innovations closer to sports lifestyle, thus transcending from the court, pitch, and field to the street, campus, and the mall. Coming to lifestyle, where we are enjoying fantastic momentum with adidas Originals driven by great product introductions such as the customized Stan Smith Lux Star Wars collection or the second launch of our collaboration with Kanye West, the Yeezy Boost 350. Our biggest footwear franchise at Originals in 2015, however, can only be the iconic Superstar, hyped by various creative drops such as the Supercolor collection by Pharrell Williams. Building on the success of the Supercolor, where we have sold out each and every one of the 50 different colorways, we recently introduced the next exciting collaboration with Pharrell, the Supershell.
For this special product line, Pharrell has collaborated with creatives from around the world to bring a new chapter of the Superstar to life by changing the styles of the front part of the Superstar with various graphics and pictures. At Reebok, we have just launched the Reebok CrossFit Nano 5.0, a training shoe that features Kevlar material for protection and durability. Best platform to showcase and celebrate this and all of our other new CrossFit products is no doubt the official Reebok CrossFit Games, as we are outfitting every athlete with apparel, footwear, and accessories during the course of the finals. The 2015 Reebok CrossFit Games marked the fifth year of our partnership and evolution with CrossFit.
Year after year, we are getting more inspired and excited by the limitless potential that CrossFit offers, and we look forward to continuing to evolve our products to service the ever-growing CrossFit community. Another partnership at Reebok, which I'm equally excited about, is the UFC. Recently, UFC and Reebok unveiled the first ever UFC Fight Kit, which will be worn by every athlete that steps into the octagon. UFC athletes represent some of the toughest and most dedicated humans in the world, and Reebok is proud to develop the first ever dedicated kit to support and enable their greatness. This launch is truly a landmark moment for Reebok's partnership with the UFC as well as the sport as a whole. Turning back to TaylorMade-adidas Golf.
As I have mentioned before, we are carefully and diligently reviewing the current situation at the TaylorMade-adidas Golf and need to find answers to some very important questions over the next couple of weeks. At the same time, however, one thing is already clear. TaylorMade-adidas Golf has always been at the forefront of the game from an innovation point of view. While the most recent product introductions might have lacked major innovations in the eye of the consumer, I can promise you that we have one of the most promising innovations in the last few years in our pipeline, which we will introduce to the market in a very meaningful way in the course of the third quarter. This product will definitely make a difference. Before I come to the end, let me quickly refer back to yesterday's announcement with regard to the acquisition of Runtastic.
In line with our strategic business plan, Creating the New, this acquisition is a clear reinforcement of our commitment to inspire and enable athletes of all levels to harness the power of sport in their lives. As you know, at the adidas Group, we aim to create the future of sport and as such, we are absolutely convinced that digital technologies provide new capabilities and insights to help athletes take control of their sporting destiny, whether improving their performance, sharing their experiences, or creating their own great social moments of sport. The acquisition, which closed yesterday at an enterprise value of EUR 220 million, will add considerable value on our journey to deliver new world-class digital sports experiences. In addition, it offers the opportunity to grow a highly engaged athlete user base and leverage the power of our broad product portfolio.
Let me just share some facts and details around Runtastic with you. Runtastic is a leading health and fitness app company. Founded in 2009 and headquartered in Austria, Runtastic has shown tremendous growth in a short period of time. The company has already made 70 million registered users in more than 140 million app downloads worldwide, and is growing at a pace of over 140,000 new downloads each day. Runtastic has a strong and industry-leading market position. Offering 20 apps across endurance, health, and fitness activities, and available in 18 languages, Runtastic has extensive global reach. To accelerate growth, the company has been aggressive in rolling out customized language versions, which is proving to be a major competitive and first-mover advantage. In the U.S. alone, Runtastic is already counting close to 10 million registered users.
Why did we decide to further strengthen our digital activities with this acquisition? The adidas brand was the first in the industry to comprehensively bring data analytics to the athlete. With decades of continuous investment in sports science, sensor technology, wearables, and digital communication platforms, there is no other sports company that has done more to innovate sports and change the game through technology. adidas' variety of digitally enabled products, such as balls, wrist devices, apparel, shoes, web, and phone apps, goes unmatched. No other sports company has the diversity of sports and fitness activity coverage and understanding of data related to athletes' physiology and motion in play. As one of only two global leaders in our industry, we are also at the forefront when it comes to digital brand commerce. We create the most exciting products and stories.
We have a wide CRM base, as well as leading content creation and activation platforms, such as our global newsroom. Simply speaking, we are listening to our athletes and consumers, and we have built the skills and ability to understand their needs. Now, with the cutting-edge digital experience of Runtastic, we are delivering best-in-class digital sports experience to our consumers. Runtastic's fast pace and high energy will speed up the adidas Group's ability to reach both partners' combined vision to make sport inspiring and part of everyone's lives, creating unexpected sport experiences that will resonate and clearly stand out in a crowded and constantly changing landscape. I'm very excited to welcome Runtastic, as I'm absolutely convinced that the company, its management, and all its employees will contribute greatly to our multifaceted vision for a digitally-powered future of sport.
With that, ladies and gentlemen, let me thank you for your attention. Now, Robin and I are happy to take your questions.
Thank you. If you would like to ask a question at this time, please press the star or asterisk key, followed by the digit 1 on your telephone. Please ensure that the mute function on your telephone is switched off to allow your signal to reach our equipment. If you find that your question has already been answered, you may remove yourself from the queue by pressing star 2. Again, ladies and gentlemen, please press star 1 to ask a question. We will pause just for a moment to allow everyone to signal. Our first question comes from Antoine Belge of HSBC. Please go ahead. Your line is open.
Yes. Good afternoon. It's Antoine at HSBC. Three question, if I may. First of all, I think you mentioned that what's happening at TaylorMade won't affect the overall guidance. Can you be a bit more precise in terms of what you expect in terms of operating losses for the golf business in 2015? I think last year, the loss was in sort of EUR 100 million. Do you expect a wider loss this year? Second question, I think you mentioned the UEFA, the Euro 2016 around the corner and also the Olympics. Is it possible to tell us if you expect Q4 this year to be already impacted, a bit like, in the last World Cup, we had a strong Q4, strong Q2, less in Q1, so if you could flag any sort of timing impact that we should be aware of.
Also, with regards to the cost of the Brazil Olympics, do you expect them to be higher than the one in London? I think Swatch mentioned that they were expecting actually a bit of a less expensive spending for the next Olympics. Finally, the dollar hasn't really moved in the right direction since we last spoke. Do you, looking at the current rates, do you think that the gross margin in 2016 can be at least flat year-on-year with the current level of the dollar? Thank you.
Okay, Antoine. Let me start with the first one, TMAG. As I have said during my speech already, there are several factors which have influenced our development. First and foremost, I think that our two introductions, the AeroBurner and the R15, are not selling through as well as we have expected. They are selling through okay, but not to the level which we have expected. There is definitely still the market challenge. Even rounds are played, not going down, which is good, but units sold are still down in the first six months. I also have to say that our competitors have become better over the last 12 to 24 months, and they are catching up to the advantage which we have. Yeah, we will make a loss in 2015, but definitely not wider as we have had in 2014. Second question, Euro 2016. Yes, absolutely.
You can expect already in the Q4 that we introduce the new jerseys of our teams, which are contributing in France, I have to say. We're also bringing in new football collections. As you know, we are the sponsor of the Euro 2016, so we're bringing the new match ball, et cetera. This will start already in Q4. Third question, Olympics in Rio next year. No, our costs by far not as high as this time. We are not sponsor, and you might remember that in 2012 we have been sponsor of the LOC, and therefore, have spent already upfront a lot of money. This time we are not the sponsor of the Rio Olympic Games. Of course, we are sponsoring our national federations, but not the games by itself.
For the last question, in terms of the gross margin development for 2016, it's too early for us to give any specific guidance on this. At the moment, we're not fully hedged yet. We'll do that as soon as we can, obviously. It's clear that with the development of the currencies, there will be a pressure on the margin in terms of the hedging rate alone. If you look at periods where we have had this development in the past also, we have been probably the best in our industry at being able to mitigate this, and we'll continue to do whatever we can to mitigate this as best we can.
Even if you look at the half-year results that we just presented today, we've had over 2% or 2.5% of negative headwinds in terms of FOB and pricing pressure, we've been able to compensate that at least for the largest part. I think it's important to note, however, that as we manage our expectations for 2016 and our improving profitability goal that we have, we do not intend to cut back on our investment in marketing or anything like that. We will manage our gross margin as best we can. We'll give you guidance on the details of that closer to the end of this year.
Thank you. Just to follow up on that subject, which are the area of your business where you still see potential for price increases to mitigate the impact? On where are the area where you think it's been more difficult than in the past to increase prices?
There are obviously differences in particular markets, there are obviously differences in some of the basic product we have. Quite generally, we believe that we have opportunities across the board. With price increases, we have to be obviously sensitive to the market, it won't be one particular rate for everybody, obviously. We are very confident there is considerable opportunity to continue to mitigate these pricing pressures with price increases.
Thank you very much.
Thank you. Our next question comes from Adrian Rott of Deutsche Bank. Please go ahead.
Good afternoon. Hi, everyone. Number one, please, on Western Europe and LATAM, I guess you're quite pleased with the performance and both regions certainly ahead of my expectations. Just be good to elaborate maybe a bit further on what's behind the strong growth here, specifically on Western Europe. Has this mainly been driven by new product and volumes, or has it been related to pricing and channel initiatives? That would be great. Also for LATAM, you mentioned strong growth in retail. Would also be interesting to hear about the contribution of pricing, because if I remember correctly, you've sort of started to raise prices in some LATAM countries in Q1 already, whether it has been similar in Q2. Secondly, on gross margins, again, you stated that half of the decline is basically due to TaylorMade, so still some declines at adidas and Reebok as well.
You mentioned labor costs and FX. Could you just split up again a little bit further what's been happening in terms of mix pricing and whether mid-season sales have played a role here as well? Lastly, quickly, just on retail. New guidance for net store closures is only 40 for the full year rather than 60. Is that mainly driving the upgrade in your full-year guidance for retail growth? Thanks very much.
Adrian, let me start with the first one, Western Europe. As I have said in my comments, Western Europe was definitely a key area for us when we spoke 12, 18 months ago. We are very pleased with our development, especially when you think that also, compared with last year, where we had the German DFB jersey, where we sold a huge amount. It is broad-based. I told you that football is doing very well. It's training. It's, of course, adidas Originals. Really broad-based. When I look into the future, which means the next six months, then I even as excited as we have been for the first six months. We are more or less growing in every country. In Western Europe, the biggest challenge, as I have just said, is in Germany because of the big comparisons. Even here, we are doing quite well.
In France, England, Spain, Italy, this is quite exciting. It's coming from new product introductions, better distribution channel execution, stronger marketing, and of course, also price increases, where we do believe we have price elasticity because we are bringing new, better products to the market. The same is similar to Latin America, I must say, this is even more surprising because when you imagine that last year we had Argentina, we had Mexico, we had Colombia, all our World Cup participants where we had strong sales, I think this is the 10th or 12th year in a row where we grow high single or double digit. In Q2, we grew 34% in last year, now again, we are growing at a high mid-single digit. This is quite an exciting time.
Once again, although here, this is a mixture of initiatives which I have just spoken about.
Martin, for your second question addressing gross margin, the development, yeah, we are down 90 basis points for the quarter. That's 50 basis points is specifically due to the poorer margins at TaylorMade. On a gross basis, we've had FOB increases of around about 1.2 percentage point. We've had also price increases, particularly think of the FX impact through Russia and what have you, also around 1.4%. We've been able to compensate the vast majority of that with price increases and also with our pricing mix. The pricing mix has been favorable. Of that 40 basis points, that's not TaylorMade. Net, 50% of that's probably FOBs and 50% of it's probably pricing. In terms of your third question, the retail.
No, it is definitely not correct that our confidence and increased guidance for retail comes from the fact that we're only closing a net 40 stores now instead of 60. The major reason for this is the continued positive development of e-commerce, also as you've seen from our profitability development in retail is doing well for us. It's not because of the net closure difference.
All right. Thank you very much, gentlemen.
You're welcome.
Thank you. Our next question comes from Chiara Battistini of JPMorgan. Please go ahead.
Good evening. Thank you for taking my questions. First question on Golf and your statement in this morning's release that you're exploring options, especially for the smaller brands, if you could elaborate further and especially on TaylorMade, if the opportunity of a good disposal came up, if you would consider that. Secondly, if you could give us a like-for-like in Russia for quarter two and on the gross margin, I've noticed that gross margin in Russia was down just 100 basis points in the quarter two, which was much better than what I was expecting. If you could comment on what measures you took to protect the gross margin so well. Finally, on marketing as percentage of sales, I see that the decline in marketing as percentage of sales in quarter two comes mainly from the adidas brand.
I was wondering whether this is just operating leverage coming through or rather your decision to start cutting marketing as percentage of sales. How are you thinking about that, thinking about full year 2016, please? Thank you.
Hi, Chiara. Let me answer your first question on TaylorMade-adidas Golf. As I have said, we definitely will explore all future options in the golf business. Obviously, we are first looking at the non-core assets of Adams and Ashworth, but as I said, we are looking at all options, this could also include that we have to take hard cuts. This could be that we also talk about the disposal of TaylorMade. We have not taken yet a decision because we still have to do some more analysis.
In terms of your second question, Chiara, that we have what is the like-for-like for Russia. Russia like-for-like is down 15%. You said the gross margin hadn't deteriorated as much as you had anticipated. Yep, that's great. It's also unfortunately due to the some of the hedging, or sorry, non-hedging, some of the currency effect is also at a group level. In terms of the Russian business, you might recall that we've quoted Martin, and he said this also when he was here in March, that they've been very successful in putting up prices, which has helped mitigate some of that. Your third question, I'm just trying to remember, you suggest the marketing was up in the second quarter. I don't believe that's-
No, down. Down as a % of sales.
No. I think it is actually up. We have increased our marketing working budget 9%, I think, in the quarter, year-over-year.
As % of sales, it's down, no?
It's a small percentage as a percentage of sales. Obviously, we're getting leverage out of this, and that's what we've guided to as well for the full year.
Perfect. Maybe if I can just follow up on the like-for-like for Russia, minus 15%, is that for quarter two, not for H1?
Yes, that's correct. Yep, that's correct.
Would you be able to give us the mix between pricing and volumes or?
No, I can't give you that. I don't have that. I think that they've done what they've been able to do in the market with pricing, but obviously, we can't compensate for everything with pricing. There's obviously volume impact as well.
That's perfect. Thank you very much.
Welcome.
Our next question now comes from Jurgen Heathcote of Barclays. Please go ahead.
Hi. Yeah, thank you. I was just going to come back to the comments in the press the other day that you were looking to sponsor James Harden in the basketball category. As I say it, Nike actually reported last year they had about $3.7 billion of income from basketball, you're clearly a tiny fraction of that. Is it actually possible, do you think, for you to compete within the basketball category in total? In fact, do you actually need to actually be within that category? I know it's a big category, but it's so dominated by Nike, that isn't it just putting an awful lot of money behind something where it's going to be incredibly difficult to compete given the dominance of the main player? Thank you.
Okay, Jurgen, this is Herbert. This is correct. We have invited James Harden to join our brand. We definitely do believe that basketball is a sport where we have to be in. We always have been. This goes back into our history with a lot of players, Kareem Abdul-Jabbar, just to name one of them. You know that basketball is a big sport in the U.S., but not only in the U.S., also in China, for example. We definitely want to compete in basketball, therefore we will build our roster of athletes. We have already great athletes. Just think about Andrew Wiggins, which we took last year, he became Rookie of the Year with Damian Lillard, John Wall, Derrick Rose. We definitely want to be competitive in this area. Yeah.
This is a tough place in the U.S., we definitely think that we have the right to play there.
Okay. Thank you. Can I ask a really nerdy question, just coming back to Chiara's question on the Russian margin? Did you say that some of the effects on the ruble was actually taken at the unallocated level? Because according to my numbers, at least, your unallocated gross profits actually fell just a little bit, so it didn't seem to have made that much of a difference at that level. Is that where it's actually taken?
No, in fact, we haven't hedged, so there's nothing. For the stuff that we hedge, where we have hedged, we had some small hedges in the past. They would have been all at headquarters, in this period, there's no hedging on the rubles, so there were nothing in headquarters in this boat.
Okay, thank you.
You're welcome.
Our next question now comes from Louise Singlehurst of Morgan Stanley.
Hi there. Good afternoon. Three questions from me, please. I'll be typical on the three questions. Firstly, can you just talk about cost savings? I think Herbert alluded to a few comments earlier on in the call. Following on the sponsorship and asset question, are there ways that you can take away some of the spending from older areas where you're obviously prioritizing some of the new relationships, such as the James Harden point made previously? Secondly, just on golf, can you help us think about the EBIT losses and the contribution of Ashworth and Adams in the context of the overall golf division? I know they're relatively small on the revenue contribution, but what they are in terms of the EBIT loss. Finally, on Runtastic, can you just talk about the integration process there and how we should think about the revenue opportunity?
Obviously, there's the usual subscription, how you're integrating that across the sales opportunity for the broader group. Thank you.
Okay, Louise, let me start with the last one on Runtastic. There is no integration. We will leave Runtastic in Linz because we definitely do believe this is the cell of the digital nerds who are together there. There are around 130 people, highly engaged, young workforce, we don't want to bring them into the corporate life to give them the freedom for creativity. Of course, we will use all the synergies which we have between, for example, our miCoach system, our data, our science, which we have as no other company knows more about athletes as we, combine it with the fast and reactive tendency Runtastic has. Your first question on cost savings, especially in the assets.
Yeah, of course, we are dropping assets, as you know, which are smaller ones, which we have done already and announced here in Germany, for example, the Bundesliga clubs of Bayer Leverkusen and Nuremberg. We are also dropping assets left and right. To really focus on that, what we think is important for the future, these are the creators who are helping us in our new plan, Creating the New. James Harden would definitely be a creator, as you know. He has been named MVP from his peers, he's a great player. He's an exciting personality. We will see, we are also looking around for other assets. Take Man United, which we are very happy, I said already before in my comments how exciting the sales has been in the first few days.
On the other hand, we also, as you rightly imagine, have to cut on some other places.
Louise, we don't break down the individual units of TaylorMade-adidas Golf in terms of profitability, but you must know that Adams and Ashworth is about 10% of the business there, so it's not all that significant. Also, you should realize that when we're talking about golf and profitability generally, don't forget what Herbert said in his comments earlier today, that the adidas part of the TaylorMade-adidas Golf business in terms of the footwear that we're selling and the apparel that we're selling, that's been performing better than the hard goods business. Just a small information for you.
Okay, thank you.
You're welcome.
Our next question now comes from Piral Dadhania of RBC. Please go ahead.
Hi. Good afternoon, gentlemen. Just one question for me, please. Just looking at the adidas brand within the context of Originals and Sport Style, it's obvious that your Originals and Sport Style business has clearly outperformed with growth of approximately 40% in the second quarter. That would suggest that the performance side of the business is under some pressure, probably partly due to a tough football comp. Could you just share with us the actual growth or decline within the performance business and how you view the imbalance between Originals, Sport Style, and performance going forward, and whether we should see a normalization going forward? Thank you.
Yeah. First and foremost, it's correct that our Originals and our NEO business are developing very well. I definitely think that it would be the wrong assumption to say that our performance business is not doing that well. First and foremost, we have to have in mind that it's highly related to the comparing numbers of football against last year. As I have said in my comments, football footwear is up 17%. It's the football license jerseys from the World Cup which are bringing the result down. Running is up 2%, training is up 6%. Training, as you know, is a big category. Performance is doing good. Obviously, there are some minor areas like basketball, where we are slightly down.
The bigger areas, they are all growing, and this is definitely part of the comparison that we have for the first half 2014 because of the World Cup.
Right. Thank you.
Our next question comes from Volker Bosse of Baader Bank. Please go ahead.
Hello, gentlemen. It's Volker Bosse from Baader Bank. Starting with TaylorMade-adidas Golf, your original outlook was to return to growth in the current year. Now, having first half year sales figures on hand, how do you adjust your full-year sales outlook for TaylorMade? Second, on Russia, how do you see the current trend and your full-year expectations in terms of sales year-on-year? Third question on Reebok was down 9% in North America. You mentioned streamlining process of the factory outlet business in the U.S. Is this something which will be finalized and concluded in the current year so that we can expect Reebok to be up also in North America from FY 2016 on? Last final question is on your competitor, Under Armour, who just recently opened its European headquarter here in Munich.
How do you see or already feel the competition with Under Armour here in Europe? Thank you.
TaylorMade, I think I have mentioned all the reasons why we are not performing as we have projected, I don't need to repeat them. Yeah, we will have a decline in 2015 on TaylorMade.
Okay.
In Reebok in America, this is correct. It is mainly by the closure of our factory outlets. I think it's also fair to say that America is our toughest market because we are growing everywhere in the world with the Reebok brand besides of America. Obviously, it's our target in 2016 to get back to growth to the U.S., but it's still too early to talk about 2016. This we will do in November when we speak to you again. Finally, Under Armour. We take every competitor serious, and it's not only Under Armour. We have ASICS, we have even Skechers, et cetera. We take every competitor serious, as we do.
We have our strategy, which we believe is successful, and I definitely do believe that the first half and the second quarter specifically is a clear proof how we can drive our main brands, especially adidas and Reebok.
Okay. Thank you.
Our next question now comes from Zuzanna Pusz of Berenberg. Please go ahead.
Good afternoon, everyone. Just three questions on my side. First of all, your comp store sales declined by 2% in Q2. I was just wondering whether you could give us more color on comp store sales growth by region, and perhaps most importantly, whether you have seen declines anywhere else apart from Russia. Secondly, maybe if you could just update us on the basketball business. How has the growth been in this quarter? Finally, I understand that it's too early to speak about the potential impact of U.S. dollar hedging next year. Would you be able to give us more or less the hedging rate you have secured so far? Thank you.
Zuzanna, let me start with basketball. Basketball was down -7 in the second quarter, you should also have in mind that the second quarter is not a big basketball quarter. It starts now in the third and in the fourth quarter when the NBA starts again.
You were asking about the comp store sales. If we exclude Russia, comp store sales for the second quarter were actually a 3% positive, because obviously Russia is a very big market for us in own retail. For the half year, excluding Russia, it would be 5% positive. Your last question about the dollar hedging. No, I'm not going to give an update on that at this stage. We will do that in November. We are not fully hedged yet, therefore, I think with the volatility, it would be incorrect to give any sort of indication at the moment. We are considerably advanced, and we will be giving this guidance, obviously, when we close end of the third quarter.
Yeah. Perfect. If I may just follow up. Regionally, you didn't see declines in any other regions apart from Russia in terms of your comp store sales in Q2, just to confirm?
Yeah. I think the only one was North America. We've mentioned some of the aspects of that, and also Latin America. The major markets were all up. If you look at China, significantly, Japan, significantly, the emerging markets in Western Europe are also mid-single digit.
Okay. Perfect. Thank you.
Our next question, ladies and gentlemen, comes from Dan Homan of Citi. Please go ahead.
Thanks. Hello. A couple of questions first of all, on OpEx. Just the sales and marketing growing slower in Q2 than in Q1. Was that a pull forward of the deceleration in marketing spend that you previously flagged, or is there going to be a further deceleration in the second half? Then also on operating costs, was there any FX or hedging benefit in Q2 at all, any one-off benefit that we should be aware of?
Yep. In terms of MWB, I really think you should just recall a comment made earlier on this in terms of timing. Obviously last year it was an event year for us, major event, World Cup, and some of our expenditure was specific to that. Obviously we have the different campaigns for this year, not the event, and that is the only real reason why from quarter to quarter, the trend and the marketing spend might be different. Your second point about the FX impact for the half year on our OpEx is around EUR 160 million. There's always pluses and minuses in certain of the balance sheet non-euro denominated positions. I think for this period it was a positive EUR 15 million or EUR 16 million. That is something that is always very volatile, depending on the rate movements at the end of the period.
Your last question I've forgotten, but you had a third question, I think. Could you just repeat it?
No, sorry, I haven't asked it.
Oh, well.
The final question was on Runtastic. I was just wondering if you could share any information about the growth over the last couple of years. I noticed that EV, when Axel Springer acquired a couple of years ago, was EUR 22 million. Wondering what's driven the tenfold increase over the period.
Yeah, it's definitely the growth of revenues, but even more the growth of users, which drives up the price. You have heard that Runtastic has now 70 million users, 15 million monthly active users, which is an even more impressive number. They have 140,000 downloads every day, and in total, they have now over 140 million downloads. They have 20 apps in 18 different languages and are, I think in 20 countries, market leader, be it in France, in Italy, in Spain, et cetera. They have 10 million users in the meantime in the U.S., and they have just gained five million users in the last few months since we have started our discussion. They are permanently bringing out new apps, so just launching next week a new app as well. Therefore, and for some other reasons, we have decided to go with Runtastic.
Obviously this is one of the key digital app companies, and we are quite happy that we could partner with them.
Okay, thank you.
Thank you. Our next question now comes from Christopher Svezia of Susquehanna Financial Group. Please go ahead.
Good afternoon, everyone. Thanks for taking my questions. I guess first, I want to talk about running for a moment. Being up 2%, I think in the second quarter, and I think footwear up 5% year-to-date, why wouldn't that be maybe stronger just given all the momentum as it pertains to Ultraboost and just the Boost platform? Are you seeing declines in other categories within your running business that sort of mitigate that? Maybe if you can just give us some thoughts about how you think the running business will play out for the balance of the year globally and more specifically North America. My last question just pertains to the guidance.
Just curious, you're still guiding for mid-single-digit currency neutral growth for the total company, despite being up 7% year-to-date and increasing your growth targets in a handful of key markets, which seem to mitigate the pressure at TaylorMade. That would imply a low to mid-single-digit currency neutral growth in the back half of the year, despite some Euro Cup shipments. Also just on the profitability side, it also just seems like it implies somewhat flattish profitability despite some improvement in gross margin in the second half. Maybe you can just walk through that a little bit, if you could, for us in terms of understanding that dynamic. Thank you.
Chris, let me take the first question on running. I think your observation is quite right, but you have to have in mind that we told you beginning of the year that we had over inventories, especially in the U.S. market. We are quite careful, especially with our Boost technology, where we deliver it, how many quantities we give in. We wanted to make sure that we clean out the market and bring the inventory down. Therefore, we have been more careful with the volumes which we're giving into the market. This is the only reason. As I have said several times, we think that especially with Boost, we have a groundbreaking technology. This should be a franchise for us for the future to come, therefore, we are quite careful how many volumes we are giving into the market.
In terms of our guidance, well, we're giving the best guidance we can with the visibility we have at the moment. The only factor perhaps you might be missing is we have always called out that this is a year where we are investing in our brands. We are obviously, with our new business plan, are creating anew, doing a lot of things to make sure that we're setting our organization up to continue to grow significantly, but also improve our profitability sustainably. This is a period where we also invest.
If I can just have a quick follow-up on that, Robin. If you think about the third quarter versus the fourth quarter and some opportunity to get some early shipments as relates to your cup product, would it be fair to say that fourth quarter should be, from a currency-neutral perspective, stronger versus the third quarter?
The third quarter is always our biggest quarter. The third quarter is our big quarter. It's probably fair to assume that the fourth quarter this year will be better than last year because of that event. Yeah.
Okay. All right. Thank you very much.
Thank you very much. We have time for one more last question here.
Thank you. Our last question will come from Simon Irwin of Credit Suisse. Please go ahead.
Hi, gents. Just a couple of quick ones. Firstly, can you just talk about the Pump? There was a new product launch in Reebok, there's absolutely no mention of it whatsoever, which kind of rings a few bells. Secondly, can you just give us a few more metrics about Runtastic in terms of revenue or anything kind of useful like that? Your comments would seem to imply that you don't feel the need to buy anything else in the kind of digital social sphere. Is that it as far as you're concerned? Then very quickly, can you just talk a little bit through the new product launch in football? Is that going to change the natural phasing of 2Q and 3Q? Have you actually kind of dragged sales forward into 2Q as a result of the new launches?
Okay. Let me start with the first one with Pump. Damn shit, we forgot to mention Pump. Pump is an old technology of Reebok, which we re-innovated and brought to the market in 2015. This we will continue in 2016. As we always have said, for the fitness and training brand, running of course is an important area, therefore the Pump technology plays into this category, you will see further new drops coming out of Pump going forward. Second question on Runtastic. I spoke already a little bit before that Runtastic has very good double-digit growth rates over the last years, this will continue. Obviously, we don't talk about the exact numbers in the revenues, but what we are giving you is the users and how this is increasing.
I said it already, they have 70 million users now, 15 million monthly active users, more than anybody else. They are market leader in so many countries. 20 apps, 18 different countries, 50% of their revenues in Europe, around 12%-15% in America, 25% in Asia, and the rest in Latin America. Also very internationally broad based. This is what I can give you in terms of numbers. In terms of product launches for football, have in mind that with X, we just started in Q3. Obviously we have the majority of some new products coming in in Q3, and this will continue in Q4 because when the Europe is coming up, you know that we are starting normally in the fourth quarter with our jersey launch, and then we bring some new football boot concepts into the market.
Going into 2016, you will see some new innovative products from us as well up to the European Championship in 2016. From a launch cycle, this is nothing really different than what we have done in the past.
Excellent. Thank you very much.
You're welcome.
Okay, ladies and gentlemen, that actually completes our conference call for today. I would like to thank Herbert and Robin. Our next reporting date will be November 5 for our Q3 numbers, but I'm sure that we're going to be in contact with you over the next couple of weeks, either over the phone or during our upcoming road shows in Europe and the U.S. As always, if you have any questions, please do not hesitate to reach out to any member of the IR team. I would like to thank you for your participation and wish you a very good and sunny day. Bye-bye.