Adidas Raises Outlook After Beating 2015 Targets -- Update

By Ellen Emmerentze Jervell 

FRANKFURT-- Adidas AG on Thursday raised its outlook for the second time in four months after exceeding its revenue and profit targets for 2015.

Based on preliminary figures for 2015, Adidas said fourth-quarter net profit rose 12% to EUR720 million ($813 million), compared with a year earlier, after a strong performance from its Adidas and Reebok brands and double-digit sales growth in Western Europe, China and Latin America.

"We are in great shape." Chief Executive Herbert Hainer said. "This gives us every confidence that we will again grow the top and bottom line."

Adidas said it expected currency-neutral sales to rise by a double-digit percentage in 2016.

The German sportswear company has in recent months been recovering from a period of sliding sales, and its earnings have been hit by currency losses. In November, it raised its full-year 2015 earnings target after sales bounced in the third quarter. In the past year, the company's share price has increased roughly 40%.

"Despite the ongoing macro concerns, the sporting-goods industry as such is experiencing strong momentum globally and Adidas is benefiting from this as well," said Berenberg analyst Zuzanna Pusz.

Mr. Hainer said the company also experienced "accelerated momentum" in North America.

Adidas has gained traction in the U.S. lifestyle sector lately, helped by its cooperation deal with rapper Kanye West and the launch of his Yeezy Boost shoe series. In 2015, Adidas Originals, the company's urban streetwear unit, was the most-liked sneaker brand on social-media platform Instagram, with 78.8 million likes in the course of the year.

Matt Powell, a sports-industry analyst at NPD, said recent Adidas sales in the U.S. have been positive. Retailers have been posting "good liquidations," he said.

Mainfirst bank analysts said Adidas's current momentum in North America and Western Europe was "as expected," given that wholesalers continue to pull forward orders ahead of the European soccer championship and Rio de Janeiro Olympics.

In January Adidas said Mr. Hainer would be succeeded by outsider Kasper Rorsted, a star in the German financial community and currently CEO of soap and beauty-products maker Henkel AG.

For all of 2015, Adidas's sales rose 16% to EUR16.9 billion, compared with a year earlier, when adjusted for currency effects.

Adidas said it would increase its marketing investments in 2016.

The company plans to release its complete full-year results on March 3.

Write to Ellen Emmerentze Jervell at [e-mail]

(END) Dow Jones Newswires

February 11, 2016 14:53 ET (19:53 GMT)

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