Adidas AG is limbering up nicely for 2012, a year that includes both the London Olympics and the UEFA Champions League.
After raising its full-year 2011 profit forecast, the world’s second-largest sporting goods company on Thursday said that it expects to see a sales increase next year in the mid- to high-single-digit range on a currency neutral basis.
The Herzogenaurach, Germany-based firm also said it has signed a share purchase agreement to acquire Five Ten, an action sports firm, for a total purchase price of $25 million, contingent upon Five Ten achieving certain performance measures over the next three years. The deal, which is expected to close in the next few weeks, includes all of the issued share capital of Five Ten USA.
Herbert Hainer, the group’s chief executive officer, told a conference call that Adidas is gunning to reach the half-billion euro, or $680.4 million, mark in sales by 2015 for the outdoor category.
Approaching full-year sales of 300 million euros, or $422.1 million, outdoor was the brand’s fastest growing category through the nine months ended Sept. 30, rising 40 percent.
Five Ten for full-year 2011 is expected to generate around $23 million to $25 million in sales versus around $15 million in 2010, Hainer noted. Ninety percent of the brand’s business is generated in the U.S.
Emboldened by a stronger-than-expected performance in the first nine months, Adidas for the third time raised its full-year 2011 earnings forecast “at a rate approaching 16 percent,” up from a previously stated forecast of 15 percent.
Third-quarter net profit rose 14.1 percent to 304 million euros, or $430.3 million, versus 266 million euros, or $343.1 million, in the year-ago period. Net sales in the period rose 8 percent to 3.74 billion euros, or $5.29 billion, versus 3.46 billion euros, or $4.46 billion.
“The traction we are gaining as we implement our strategies is especially pleasing as the external environment is not without its challenges, be it the economic uncertainty, stalling consumer confidence or struggling regional competitors. I do believe that this industry is resistant to financial crises, as we proved that in 2009,” Hainer said. “What makes me so confident is that our growth is so well balanced, it is coming more or less from everywhere — all the countries, all the brands [Adidas, Reebok and TaylorMade-Adidas Golf], in all the categories.”
In North America, Greater China and Russia — the brand’s so-called attack markets — sales through the nine months rose 14, 28 and 31 percent, respectively. Net profit rose 16.4 percent to 653 million euros, or $918.8 million. Net sales rose 11.3 percent to 10.08 billion euros, or $14.18 billion, versus 9.05 billion euros, or $11.91 billion, in the equivalent year-ago period.
Hainer attributed the group’s resilience to the global trend toward sportier lifestyles. “People are living longer and want to keep themselves fit and in good health. People of every age everywhere are doing sport,” he said.
In a bid to offset the impact of high raw material costs which have led to recent price increases of up to 10 percent on goods, Hainer said the firm would be more efficient with its designs going forward. “There will be no whistles and bells,” he said.