Adidas AG reported on Thursday that its profit over the third quarter of the fiscal year surpassed analysts forecasts. The results come as a relief for the companys Chief Executive Officer Mr. Herbert Hainer, backing his efforts to turn the Germany-based sporting-goods maker around.
Mr. Hainer said in a press call: “While certain factors have been going against us over the past 18 months, we know we have to raise our game, especially in difficult conditions.” He also added: “I am confident we will stabilize and grow sales and margins in 2015, returning the segment to profitable levels.”
According to Adidass statement, the companys net profit declined by 11% to €282 million ($353 million). The result beat analysts projections for €268.4 million. The company shared that its sales rose by 6.2% and reached €4.1 billion, topping expected sales of €4 million.
The company explained that its profit decline is due to the continuing weakness of emerging-market currencies and that it was also hurt by discounting and reorganization at its TaylorMade-Adidas Golf unit, which was facing difficulties because of the troubled golf market. The unit posted a 36% currency-neutral sales decline.
Apart from making the announcement of its quarterly results, the Germany-based company shared its projection for sales over the upcoming year, saying that they are expected to increase at a mid-single-digit rate. Adidas also said that it expects its net income to rise at a higher rate than group sales. The Chief Executive Officer of the company intends to reveal a new strategy in March 2015.
One of the analysts, who work at Bryan Garnier – Cedric Rossi – commented on the companys performance for Bloomberg: “For the first time we are seeing signs of a more aggressive U.S. approach at Adidas. They need to rebuild a connection to U.S. consumers.”
Adidas AG rose 4.02% to $59.04 per share in Frankfurt on Thursday and stood 1.61% higher at €59.99 per share at 9:39 GMT on Friday, marking a one year change of -30.81%. The company is valued at €12.35 billion. According to the Financial Times, the 32 analysts offering 12-month price targets for Adidas AG have a median target of €64.00, with a high estimate of €100.00 and a low estimate of €49.00. The median estimate represents a 8.40% increase from the previous close of €59.04.
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