New adidas CEO Kasper Rorsted "ratcheted up" the German sportswear group’s sales and earnings targets on Wednesday, and "pledged a concerted push" in the U.S. market, as he "seeks to close the gap on arch-rival Nike," according to James Shotter of the FINANCIAL TIMES. Rorsted said that he was "keeping the outlines of predecessor Herbert Hainer’s strategy, which envisaged average annual sales increases in the high single digits" and profit growth of 15% during the five years to '20. However, he argued that the "world's second-largest sportswear group should be able to expand faster." Over the same five-year period as Hainer, Rorsted is targeting average annual sales increases of 10-12%, and profit growth of 20-22%, and the new CEO’s task has been helped by adidas’ "strong results" for '16. The group reported that sales rose 14% to €19.3B last year, "while net profit jumped" 59% to €1B. Rorsted's new performance goals for adidas "helped push the group's shares up" almost 8% to €172.30 ($181.68) on Wednesday in Frankfurt (FT, 3/8). REUTERS' Emma Thomasson reported 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." Equinet analyst Mark Josefson, who raised his recommendation on the stock to "buy" from "neutral," said, "The mid-term guidance clearly implies that new management anticipate a multi-year growth path, taking share from most peers." Rorsted said that adidas would keep "investing heavily" in the U.S., including in staff, infrastructure, marketing and in-store fittings, noting that retailers such as Foot Locker and Dick's Sporting Goods "were positive about the brand's future" (REUTERS, 3/8).
