Adidas Cuts Reebok's Midterm Sales Outlook, Expects Adidas Brand To Compensate
Adidas cut its midterm sales outlook for its Reebok brand after a license cancellation in the U.S. but said it "expects its adidas brand to compensate for the shortfall," according to Nicky Redl of the WALL STREET JOURNAL. Reebok's sales target for '15 was cut to €2B ($2.6B) from €3B ($3.9B), after it decided not to renew its NFL license and following a change in the reporting of NHL-related license sales. Reebok will now market itself as a "fitness-only brand." The company said that sales of its adidas brand are expected to rise to €12.8B ($16.7B), beating a previous projection of €12.2B ($15.9B). Adidas still expects global sales of €17B ($22B) by '15 and an operating margin of 11%. Its three key markets in North America, China and Russia are "expected to deliver around 50% of the company's targeted sales growth." European network of equity bodies firm Equinet Analyst Ingbert Faust said, "Despite the disappointing expectation for the Reebok division, the other divisions are showing extreme strength and thus compensate" (WSJ, 9/21).