| HERZOGENAURACH, Germany
HERZOGENAURACH, Germany The new boss of Adidas increased sales and profit targets on Wednesday, sending shares in the German sportswear firm to a record high as he pledged to keep investing heavily in the key U.S. market and do more to boost e-commerce sales.
The more ambitious targets will maintain a squeeze on U.S. rivals Nike and Under Armour, which have both been losing sales to the German brand in their home market, where Adidas's retro Superstar was the top-selling shoe of 2016.
"We are still in catch-up mode in North America," Chief Executive Kasper Rorsted told journalists, noting that the United States accounts for a third of global sportwear sales but is the only market where Adidas significantly lags Nike.
Rorsted, the Danish former head of consumer goods firm Henkel, replaced long-serving boss Herbert Hainer in October with a mandate to improve profitability after activist shareholders took stakes in Adidas in 2015 as the German firm fell further behind Nike in the United States.
Even before Rorsted took over, Adidas had made significant strides, lifting marketing spending and shaking up its U.S. business, helping its shares rise two-thirds in the last 12 months even though its profitability still lags that of Nike.
Adidas shares, which are now trading at a big premium to Nike, jumped 7 percent by 1103 GMT to hit a new record high, headed for their best day since November 2015.
"The mid-term guidance clearly implies that new management anticipate a multi-year growth path, taking share from most peers," said Equinet analyst Mark Josefson, who raised his recommendation on the stock to "buy" from "neutral".
Adidas more than doubled its share of the U.S. athletic footwear market to 10 percent in January, but remained far behind Nike on 45 percent, according to market data firm NPD.
Rorsted said Adidas had been unable to keep up with demand for its springy-soled Boost shoes made popular by singer Kanye West, adding that it would take 12-18 months for partner BASF to increase capacity so it could supply more soles.
Rorsted said Adidas would keep investing heavily in the United States, including in staff, infrastructure, marketing and in-store fittings, noting that retailers such as Foot Locker and Dicks Sporting Goods were positive about the brand's future.
German rival Puma has also been enjoying a revival in the U.S. market, helped by a shift towards retro styles and away from basketball shoes which has hurt Under Armour and dampened Nike's success.
SALE OF GOLF, ICE HOCKEY BRANDS
Rorsted said he wanted to focus even more strongly on the Adidas and Reebok brands in future, announcing plans to sell the ice hockey brand in addition to its golf business, which has been on the block since last May but has yet to find a buyer.
Finance chief Robin Stalker said he hoped to seal the sale of the golf unit before too long, but it was no fire sale as the performance of the business was improving, saying he was in negotiations with several bidders.
Adidas said on Tuesday it had appointed Harm Ohlmeyer, head of the group's global e-commerce business, as new finance chief from May 12, replacing Stalker.
Rorsted said he wants to expand the use of technologies such as 3D printing, and double the e-commerce sales target for 2020 to 4 billion euros ($4.2 billion) out of an expected 25 to 27 billion euro total, and from 1 billion achieved in 2016.
Nike has set a target to reach $7 billion in e-commerce sales by 2020, out of expected total revenue of $50 billion.
Rorsted also announced plans to simplify business processes, including further trimming the number of articles offered and harmonising marketing activities, similar to measures he took to boost profitability at Henkel.
Rorsted also said he would make a push to promote more women at the firm based in conservative southern Germany, while introducing a plan to link pay for top executives to the Adidas share price.
Adidas lifted targets for currency-neutral revenues to rise between 10 and 12 percent on average between 2015 and 2020, and said the operating profit margin should rise to 11 percent from 7.6 percent in 2016, albeit still shy of Nike's 14 percent.
For 2017, Adidas forecast currency-neutral sales growth of between 11 and 13 percent and net income to rise by as much as a fifth to a level up to 1.22 billion euros, ahead of the 1.13 billion euros expected by analysts.
($1 = 0.9464 euros)
(Editing by Georgina Prodhan/Keith Weir)