New Adidas CEO targets faster sales, profit growth
HERZOGENAURACH: The new boss of Adidas hiked sales and profit targets for the German sportwear firm on Wednesday and announced plans to increase ecommerce sales, simplify business processes and keep investing heavily in the key US market.
Kasper Rorsted, the former chief executive of consumer goods firm Henkel who took over in October, said he was adding goals to an existing 2015-2020 strategic plan, putting more focus on company culture, ecommerce and efficency.
Rorsted was appointed to replace long-serving boss Herbert Hainer with a mandate to improve earnings after activist shareholders bought stakes in Adidas in 2015 following a series of profit warnings as the German firm failed to keep pace with US rival Nike.
Even before Rorsted took over, Adidas had made significant strides, hiking marketing spending and shaking up its US business, helping its shares rise two-thirds in the last 12 months even though its profitability still lags Nike's.
Adidas shares were indicated up 4.8 per cent in pre-market trade.
On Wednesday, Rorsted said he would put a new focus on digitisation, increasing ecommerce sales to 4 billion euros ($4.23 billion) by 2020, up from a previous target of 2 billion, and expanding the use of technologies such as 3D printing.
He also announced plans to harmonise and simplify business processes, including reducing the number of articles offered and harmonising marketing activities, a similar strategy to that he pursued at Henkel, which helped boost profitability there.
Adidas now expects currency-neutral revenues to rise between 10 and 12 per cent on average between 2015 and 2020, up from a previous target for a "high-single-digit rate", while net income should grow between 20 and 22 per cent, up from 15 per cent.
For 2017, Adidas forecast currency-neutral sales growth of between 11 and 13 per cent and net income to rise between 18 and 20 per cent to a level up to 1.22 billion euros, ahead of the 1.13 billion euros expected by analysts.
Adidas also reported a fourth-quarter net loss of 10 million euros on sales up 12.5 per cent to 4.69 billion euros, in line with most analyst forecasts after it took a one-off charge to help restructure struggling fitness brand Reebok.
Adidas said it was still trying to sell its golf brands, even though it has missed an initial target to shed them before the end of last year, and said it is also now seeking a buyer for its ice hockey brand, where sales are falling.
Kasper Rorsted, the former chief executive of consumer goods firm Henkel who took over in October, said he was adding goals to an existing 2015-2020 strategic plan, putting more focus on company culture, ecommerce and efficency.
Rorsted was appointed to replace long-serving boss Herbert Hainer with a mandate to improve earnings after activist shareholders bought stakes in Adidas in 2015 following a series of profit warnings as the German firm failed to keep pace with US rival Nike.
Even before Rorsted took over, Adidas had made significant strides, hiking marketing spending and shaking up its US business, helping its shares rise two-thirds in the last 12 months even though its profitability still lags Nike's.
Adidas shares were indicated up 4.8 per cent in pre-market trade.
On Wednesday, Rorsted said he would put a new focus on digitisation, increasing ecommerce sales to 4 billion euros ($4.23 billion) by 2020, up from a previous target of 2 billion, and expanding the use of technologies such as 3D printing.
He also announced plans to harmonise and simplify business processes, including reducing the number of articles offered and harmonising marketing activities, a similar strategy to that he pursued at Henkel, which helped boost profitability there.
Adidas now expects currency-neutral revenues to rise between 10 and 12 per cent on average between 2015 and 2020, up from a previous target for a "high-single-digit rate", while net income should grow between 20 and 22 per cent, up from 15 per cent.
For 2017, Adidas forecast currency-neutral sales growth of between 11 and 13 per cent and net income to rise between 18 and 20 per cent to a level up to 1.22 billion euros, ahead of the 1.13 billion euros expected by analysts.
Adidas also reported a fourth-quarter net loss of 10 million euros on sales up 12.5 per cent to 4.69 billion euros, in line with most analyst forecasts after it took a one-off charge to help restructure struggling fitness brand Reebok.
Adidas said it was still trying to sell its golf brands, even though it has missed an initial target to shed them before the end of last year, and said it is also now seeking a buyer for its ice hockey brand, where sales are falling.
