Adidas Reaffirms Sales, Profits Targets

Adidas Reaffirms Sales, Profits Targets
Herbert Hainer

Adidas Group announced plans to overhaul its marketing strategy across its suite of brands as the firm reiterated its 2015 sales forecast of 17 billion euros (or $23 billion at current exchange rates), and an operating margin of 11 percent.

Speaking to investors and analysts at a field day in Herzogenaurach, Germany, the company said it expects sales to grow at a high single-digit rate in 2014, driven by growth in its running and football categories.

“The goal of our strategic business plan, Route 2015, is to prepare and transform the group for long-term sustainable growth and success,” said Adidas Chairman and CEO Herbert Hainer. “We will continue to focus on building desirable brands and exciting our customers at every touch point.”

Also today, Adidas confirmed its new partnership with Kanye West, who first broke the news about the deal on a radio interview last week. West recently parted ways with the company’s main rival, Nike.

In an official statement about the collaboration, Adidas said, “For 2014, we welcome to the Adidas family one of the most influential cultural icons of this generation, Kanye West. Well known for breaking boundaries across music, film and design, and partnering with our history in street wear culture and leading innovations in sport, we look forward to creating a new chapter.” Specific details on the partnership were not yet available.

During the investor day, Hainer detailed steps taken to highlight the innovation behind products in its Adidas Sports Performance category, such as the Boost running range. The company expects total Boost volumes to reach 15 million pairs in 2015. In an attempt to differentiate itself from its competitors, Adidas will bolster its marketing efforts through football and athletics campaigns in the lead-up to the 2014 FIFA World Cup.

“In 2014, we will continue to bring change to the industry, ensuring growth in each of our key categories. We will put a special emphasis on further rolling out our successful Boost technology,” Hainer said.

In addition to the planned expansion of its Neo children’s label in Europe, the footwear giant intends to launch its Adidas Originals “Neighborhood” concept stores in 31 cities worldwide, featuring apparel from urban designers.

Adidas also plans to increase the rollout of its Reebok Fit Hub retail stores in 2014, following the resurgence in consumer demand for the range, with gross margins expected to increase to more than 40 percent by 2015. 

The company reiterated its guidance of an 8.5 percent lift in operating margin for 2013.