Adidas Continues Gaining North America Market Share, With Running, Outdoor Rising
Adidas reported another "strong quarter of growth in China and North America as it takes market share from rivals such as Nike, but its shares dipped as growth slowed in Europe and it stuck to its full-year outlook," according to Emma Thomasson of REUTERS. Some investors had "predicted that Adidas might lift its forecasts" for '17 after Puma last month "increased its targets for the year." Adidas and Puma have been "gaining market share in North America as customers snap up their retro styles and lifestyle shoes instead of basketball and sports performance gear, hurting Nike and Under Armour." Data from research firm NPD showed that Adidas' U.S. market share for running footwear "jumped more than three quarters" to 16% in August, while Nike's share "slipped" 14% to 56%. Sales of the Adidas and Reebok brands also rose 28% in greater China and 23% in North America. Adidas saw double-digit sales "increases in its running and outdoor categories as well as at its Originals and Neo fashion labels, but said revenues fell from soccer and basketball, mainly due to the termination of two major sponsorship deals" (REUTERS, 11/9). Thomasson also reports Adidas "hopes the launch of new team kit" ahead of the '18 FIFA World Cup in Russia "will restore sales growth." Adidas is "making shirts" for teams Germany and Spain (REUTERS, 11/9).
GOOD POSITION: Adidas CEO Kasper Rorsted said the company is "exceptionally happy" with the Q3 results. Rorsted said of sales leading up to the '18 World Cup, "(It) will be a stronger fourth quarter than normally because of the upcoming tournament." He added the company is "by no means where we want to be in the U.S., so we continue to overinvest, and that’s why we signed the biggest sponsorship deal in our history in the U.S. when we signed” a deal with MLS (CNBC, 11/9). Adidas said that revenue generated from e-commerce advanced 39% in Q3. BLOOMBERG NEWS' Weiss, Cranny & Edwards note Adidas in Q3 also "completed the divestment of its CCM ice hockey business to Birch Hill Equity Partners" and "completed selling its TaylorMade, Adams and Ashworth golf brands to KPS Capital Partners" (BLOOMBERG NEWS, 11/9).
CRISIS MANAGEMENT: Rorsted said of the college basketball scandal involving adidas Dir of Global Sports Marketing James Gatto, “I hope you understand I can't really comment on the details, but what we’ve done is we immediately -- within 24 hours -- had external counsels do an internal investigation to reveal everything that's going on and we're completely committed to getting all the facts on the table and make the right decisions to move on. We are a company that’s committed to compliant behavior and we are upset about what's happened. Overall, the basketball business is 1.7% of our total revenue, so we don't think it will impact our business” (CNBC, 11/9).