Adidas announces ambitious financial forecast

Sports apparel giant expects to increase profit by 15 percent each year.

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Adidas issued a statement Thursday outlining the company’s ambitious goals over the next five years: 15 percent annual growth in profits, sales growth in the high single-digits and a 10-20 percent increase in dividend pay outs.

Adidas chief executive Herbert Hainer said in a statement: “Our new strategy is built on speed, focus and openness. As a result, we will accelerate our growth story and deliver superior returns to our shareholders. I am very much looking forward to ‘creating the new’ together with the Adidas Group’s more than 53,000 employees across the globe.”


How much of this five-year plan Hainer will be allowed to oversee is an open question. The Adidas board announced in February that it has launched a search for a successor to Hainer, 60, whose contract ends in 2017. Hainer, who has served about 15 years, experienced perhaps his most tumultuous year in 2014 as the company’s stock dropped 38 percent in value. The five-year financial plan replaces its predecessor, “Route 2015,” announced in 2010. The company declared the Route 2015 goals unattainable last July, citing the volatility of the the Russian market as well as disappointing sales and excess inventory for Taylor-Made Adidas Golf. In February, the company announced it was selling its Rockport shoe division.

Entering today’s meeting, Adidas faced criticism for the speed with which is responded to consumer tastes. Inevitably, the criticism attached an example of a competitor who has beaten them handily at fast turnaround: Nike. Adidas “unleashed open source,” the statement said, “a strong commitment to further strengthen the company’s ties with its consumers. ..the Adidas Group will engage with consumers, athletes, retailers and partners more than ever before, make them become part of its brands and, as a result, increasingly build brand advocacy.”

Portland Business Journal explains why the brand is pursuing a city-based marketing strategy:

Adidas developed the “cities” thread based on figures indicating that 80 percent of global gross domestic product is generated in cities.

“If we win running in New York and Los Angeles, we will win running in the US. Therefore, we are committed to win market and mind share in key cities around the globe,” said Roland Auschel, the company’s executive board member responsible for global sales, in a release.


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