New Adidas boss targets faster sales, profit
The new boss of Adidas hiked sales and profit targets for the German sportwear firm yesterday and announced plans to increase ecommerce sales, simplify business processes and keep investing heavily in the key United States market.
Kasper Rorsted, the former chief executive of consumer goods firm Henkel who took over in October, said he was adding goals to an existing 2015-2020 strategic plan, putting more focus on company culture, e-commerce and efficiency.
Rorsted was appointed to replace long-serving boss Herbert Hainer with a mandate to improve earnings after activist shareholders bought stakes in Adidas in 2015 following a series of profit warnings as the German firm failed to keep pace with US rival Nike.
Adidas shares were indicated up 4.8 per cent in pre-market trade.
Yesterday, Rorsted said he would put a new focus on digitisation, increasing e-commerce sales to €4 billion (RM18.81 billion) by
2020, up from a previous target of €2 billion, and expanding the use of technologies such as 3D printing.
He also announced plans to harmonise and simplify business processes, including reducing the number of articles offered and harmonising marketing activities, a similar strategy to that he pursued at Henkel, which helped boost profitability there.
Adidas now expects currency-neutral revenues to rise between 10 and 12 per cent on average between 2015 and 2020, up from a previous target for a “high-single-digit rate”, while net income should grow between 20 and 22 per cent, up from 15 per cent.
For this year, Adidas forecast currency-neutral sales growth of between 11 and 13 per cent and net income to rise between 18 and 20 per cent to a level up to €1.22 billion, ahead of the €1.13 billion expected by analysts.
Adidas also reported a fourthquarter net loss of €10 million on sales up €12.5 per cent to €4.69 billion, in line with most analyst forecasts after it took a one-off charge to help restructure struggling fitness brand Reebok.