Adidas is on track to reach sales of 2.5 billion euros, or $2.8 billion at current exchange, with soccer products this year as it reaps the benefit of a radical overhaul of its offer, the German sporting-goods maker said on Thursday.
This represents a double-digit increase from last year, when soccer sales totaled 2.2 billion euros, or $2.44 billion. The group posted total revenues of 16.92 billion euros, or $18.77 billion, in 2015.
“This marks a new record for our brand and manifests our leading position in football globally,” Adidas Group CEO Herbert Hainer said. (Football meaning soccer in this case.)
“I am proud to report that our complete restart of the football-footwear business 12 months ago is paying off. We have gained market share in key markets, and our footwear offering is resonating well among our young target audience,” he added.
Hainer and Markus Baumann, general manager of Adidas Football, met with reporters in Paris on Thursday on the sidelines of the UEFA Euro 2016 soccer tournament, which runs in France until July 10. Adidas is a partner of the championship, for which it supplies the official match balls.
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Hainer noted that Adidas’ soccer footwear was the leader in Western Europe’s Top 5 markets in the first quarter of 2016, with a market share of 36 percent, ahead of archrival Nike, according to NPD Consumer Panel data. The company did not provide comparative figures for 2015.
The performance has been fueled by the strong response to the Ace, X and Messi boots introduced by Adidas to replace its four previous product silos: Adizero, Predator, Adipure and Nitrocharge, according to Baumann.
“It was a very bold step on our part,” he said. “Now, with 12 months’ hindsight, it was absolutely the right step because the strategy has been very well received by consumers.”
Baumann said the laceless Ace 16+ boot, worn by French midfielder Paul Pogba on the pitch, had hit the market “like a bomb,” noting that Adidas had lots of additional innovations in the pipeline to feed the increasingly rapid cycle of the segment.
“After the Euro, we are bringing out further product updates because we know perfectly well that our customers are permanently on the lookout for novelty. They expect fresh product, innovation, color and stories every eight to 10 weeks,” he explained.
“Football is developing almost as strongly as the sneaker market, in the sense that there is always fresh momentum,” he added, noting that price tags of up to 300 euros, or $337, are no object. “The hard-core football consumer, who is an opinion leader within his group, derives social status from always being the first one to have new product. Kids are capable of buying new shoes every eight to 10 weeks to uphold the social currency they derive from their community.”
On the apparel front, Adidas said it expects to sell 1.3 million German jerseys in 2016 versus 1 million in 2012, the last time the UEFA tournament took place. This compares with sales of 3 million jerseys in 2014, when Germany won the FIFA World Cup.
Adidas is fueling interest with regular updates to its social media accounts, which feature heavy coverage not only of the Euro but also the Copa America, which is being played throughout the United States until June 26.
Following earlier partnerships with David Beckham and Zinedine Zidane, Adidas is betting big on Pogba, who penned a long-term contract with the three-stripe brand in March. Though the midfielder’s Euro performances have been disappointing so far, Hainer noted he had a bumper season with his Italian team, Juventus.
“Paul Pogba is very strong, both as a footballer and as a human being. He pretty much has it all — personality, height, looks and a distinctive style with his hair,” said Hainer. “He has the makings of a future superstar, both in terms of football and of lifestyle.”
Adidas expects net income from continuing operations to increase by 25 percent in 2016, to around 900 million euros, or $1 billion at current exchange. Sales in currency-neutral terms are expected to grow 15 percent. All dollar rates are calculated at average exchange rates for the period concerned.