Adidas increased sales and profit targets on Wednesday, sending shares in the German sportswear firm to a record high as it pledged to keep investing heavily in the key U.S. market and do more to boost e-commerce sales.

BNN.ca

“We are still in catch-up mode in North America,” Chief Executive Kasper Rorsted told journalists, noting that the United States accounts for a third of global sports wear sales but is the only market where Adidas significantly lags Nike…(Adidas more than doubled its share of the U.S. athletic footwear market to 10% in January, but remained far behind Nike at 45%, according to market data firm NPD)…

Rorsted went on to say that Adidas would:

  • keep investing heavily in the United States, 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…
  • focus even more strongly on the Adidas and Reebok brands in future, announcing plans to sell the ice hockey brand in addition to its golf business, which has been on the block since last May but has yet to find a buyer…
  • expand the use of technologies such as 3D printing, and double the e-commerce sales target for 2020 to 4 billion euros (US$4.2 billion) out of an expected 25 to 27 billion euro total, and from 1 billion achieved in 2016. (Nike has set a target to reach $7 billion in e-commerce sales by 2020, out of expected total revenue of $50 billion.)
  • simplify business processes, including further trimming the number of articles offered and harmonizing marketing activities…
  • make a push to promote more women at the firm based in conservative southern Germany, while introducing a plan to link pay for top executives to the Adidas share price…
  • in 2017:
    • increase currency-neutral revenues by between 10 & 12% on average between 2015 and 2020,
    • increase operating profit margin to 11% – from 7.6% in 2016 (albeit still shy of Nike’s 14%),
    • increase currency-neutral sales by between 11 & 13% and
    • increase net income by as much as 20% to a level up to 1.22 billion euros, ahead of the 1.13 billion euros expected by analysts.
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