Adidas shares soar on profit and revenue target rise
The more ambitious targets will maintain a squeeze on US rivals Nike and Under Armour, which have both been losing sales to the German brand in their home market, where Adidas’s retro Superstar was the top-selling shoe of 2016.
“We are still in catch-up mode in north America”, chief executive Kasper Rorsted told journalists, saying that the US accounts for a third of global sportswear sales but is the only market where Adidas significantly lags Nike.
Rorsted, the Danish former head of consumer goods firm Henkel, replaced long-serving boss Herbert Hainer in October with a mandate to improve profitability after activist shareholders took stakes in Adidas in 2015 as the German firm fell further behind Nike in the US.
Yesterday, Adidas reported a 41% increase in net profit to €1bn for 2016, helping drive its share price up by over 9.4% to a record high.
Even before Rorsted took over, Adidas had made significant strides, lifting marketing spending and shaking up its US business, helping its shares rise two-thirds in the last year even though its profitability still lags that of Nike.
Adidas more than doubled its share of the US athletic footwear market to 10% in January, but remained far behind Nike on 45%, according to market data firm NPD.
Rorsted said Adidas would keep investing heavily in the US, including in staff, infrastructure, marketing and in-store fittings, noting that retailers such as Foot Locker and Dicks Sporting Goods were positive about the brand’s future.
Rorsted said he wants to expand the use of technologies such as 3D printing, and double the ecommerce sales target for 2020 to €4bn out of an expected €25bn to €27bn total, and from €1bn achieved in 2016.
Nike has set a target to reach $7bn in ecommerce sales by 2020. For 2017, Adidas forecast sales growth of between 11% and 13%. n Reuters
CONNECT WITH US TODAY
Be the first to know the latest news and updates
