PARIS — Adidas AG was in chest-beating mode on Thursday after announcing earlier in the week that it had increased its financial outlook for the year following a 38 percent spike in first-quarter net profits, marking a fifth consecutive quarter of double-digit growth.
This story first appeared in the May 4, 2012 issue of WWD. Subscribe Today.
On a conference call, Herbert Hainer, the group’s chief executive officer, delivered a speech peppered with superlatives. “We have started the second year of our Route 2015 strategic plan exactly like the first — setting a blistering pace, leaving the competition in our wake,” he said.
The world’s second-largest sporting goods manufacturer after Nike Inc. registered net income of 289 million euros, or $378.4 million, in the three months ended March 31.
Group sales in the period gained 17 percent to 3.8 billion euros, or $4.97 billion, boosted by increases in all regions and segments — particularly in Greater China and Japan as well as from the TaylorMade-Adidas Golf brand.
“I can assure you, our strong trends in Greater China will continue. Feedback from our partners clearly shows us that Adidas is the brand with the most momentum,” said Hainer.
Dollar figures are converted at average exchange rates for the periods to which they refer.
Hainer’s ambitious “Route 2015” plan aims to boost revenues by almost 50 percent to 17 billion euros ($22.41 billion at current exchange) by 2015, led by overseas markets.
Soccer proved Adidas’ star category, with a sales increase of 23 percent. The group expects the category to generate more than 1.5 billion euros, or $1.97 billion at current exchange, in full-year sales.
Revenues in other business were up 32 percent on a currency neutral basis, driven by strong double-digit increases at TaylorMade-Adidas Golf and Reebok-CCM Hockey.
Major sporting events expected to drive business in 2012 include the UEFA European soccer championship, which kicks off next month, and the London Olympics this summer.
Hainer said sales of replica ranges of Adidas’ Team GB gear, designed in collaboration with Stella McCartney, are exceeding expectations, though described the initiative as being more marketing than commercially driven.
“The Olympics in general are far less of a big commercial opportunity than, for example, a European championship. The Olympics is helping us more to position our brand in the long term and show to the consumer that we cater to a lot of sports and not only soccer, for example,” he said.
Hainer declined to comment on commercial irregularities being investigated in the Reebok India Co., which the company estimates will have a pretax negative impact of up to 125 million euros, or $165.5 million at current exchange.
Hainer said he felt that Reebok is “going in the right direction,” with strong underlying business performance, despite facing “challenges to overcome in Western Europe this year.”
Reebok saw a 7 percent decline in sales in the first quarter, which was attributed to the transfer of sales to the Reebok-CCM Hockey segment.