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Adidas beats forecasts, progress in US

Friday, January 23, 2015 - 02:09

Adidas is reporting better-than-expected revenues for 2014 - and its Rockport sale is going through for $280 million. As David Pollard reports, the German firm has, after a poor year, been trying to turn itself around, especially in the sought-after US market.

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Ultra boost. It's one of the latest brand line-ups for sportswear maker Adidas. It's also what their share price got after an unscheduled announcement on revenues. Along with that, confirmation of the sale of its Rockport footwear brand for $280 million. Markets liked it - bidding Adidas up three and a half per cent in early trading. The German firm had a tough year in 2014 - and are looking to bounce back in 2015. Says IG market commentator, Alastair McCaig. SOUNDBITE (English) Alastair McCaig, MARKET COMMENTATOR, IG, SAYING: ''They've not had their problems to seek in 2014. The sanctions that have been imposed on Russia and Russian sanctions in the West have arguably affected them as much as any European company and they've had to look at their overall company structure and rebalance things. And the fact that they've had to asset strip as well maybe no real surprise, taking things back to the drawing board there.'' At close to 15 billion euros, sales showed a better-than-expected 2 percent increase in 2014. Charges from the Rockport sale were said to be ''double digit million'' euros. And impairment charges from the falling Russian rouble - around 80 million euros. Growth was in double digits for most regions. Though not including North America. Adidas has been trying to make headway in the sought-after US market by appointing more US execs - including an American as global brand chief - and by installing some of them in rival Nike's home town, Portland. The policy has yet to fully pay off, says McCaig. SOUNDBITE (English) Alastair McCaig, MARKET COMMENTATOR, IG, SAYING: ''I think it's a little bit preemptive to say that corners have been turned as far as Adidas is concerned in the US market. Certainly, an improvement in sentiment could well be said, but I still think there are a number of issues to be rectified.'' Not least of all among those issues: that Adidas recently slipped into third place behind Nike and fast-growing Under Armour, founded only in 1996. But the surge in the price of its shares was welcome relief for investors. They've seen Adidas share slide around a third in the last year. Full results are due on March the fifth.

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Adidas beats forecasts, progress in US

Friday, January 23, 2015 - 02:09