PARIS — Adidas plans to give back to its shareholders.
The Herzogenaurach, Germany-based sporting goods firm said Wednesday it will initiate a share buyback program in the fourth quarter this year, with the intention of returning up to 1.5 billion euros, or $1.9 billion at current exchange, to its shareholders. This will happen over the next three years.
In addition, shareholders will be paid an annual dividend in the range of 20 percent to 40 percent of net income attributable to shareholders.
Robin J. Stalker, chief financial officer of Adidas Group, said in a statement: “With the announced return of cash today we underline our strong confidence in the cash generation and growth potential of our group.”
He added: “We believe that our shares are currently significantly undervalued and this provides an excellent opportunity to optimize the company’s cost of capital, deploy cash and create further value for our shareholders.”
By 12:30 p.m. CET on Wednesday, Adidas shares had risen 2.5 percent to 60.71 euros, or $76.80 at current exchange, following the news.
In July, the company’s shares had plummeted 15.4 percent in a single trading day, after the sporting goods maker lowered its full-year guidance, citing currency fluctuation and high marketing spending related to the FIFA World Cup as reasons.