adidas reiterated its forecast of 20% net income growth for the year and expects to see sales growth in the mid- to high-single-digit range, according to a management presentations at the companys annual investor conference held today in Herzogenaurach, Germany. Management also said it expected to maintain double-digit net income growth after the Reebok acquisition, at least for the medium-term, while gross margins are expected to range between 46% to 48%.
The conference featured presentations from each regional and divisional chief. Highlights of the presentation included a clear focus on the World Cup next year, which will be held in the companys home country.
“We are already seeing strong demand for these (soccer) products across the board,” said Erich Stamminger, the companys marketing chief and current head of North America operations. CEO Herbert Hainer said they company expects to see increased impact of soccer sportswear sales in Q4 this year through the second quarter of 2006. adidas reiterated its forecast that soccer-related sales would exceed 1 billion ($1.2 billion) in 2006.
“We will achieve all-time record sales in each and every category of our football (soccer) business,” said Stamminger, also asserting they expected to increase market share in the category beyond their current 35% stake. He sees adidas share of the German soccer market hitting the 50% mark next year, up from a 47% share this year.
From a regional perspective, adidas sees Asia as the region with the most potential for growth for the company. Hainer sees Asia-Pacific sales reaching 2 billion by 2008, up from 1.25 billion last year, on a surging China market for sports products and an improving Japan business. He said that adidas will take the market share leadership spot in Japan this year.
Hainer said he expects to complete the Salomon sale “very shortly'' and expects to see EC approval for the transaction “very soon.”
Look for full deatils of the adidas investor conference in this week's issue of Sports Executive Weekly.
