Adidas’ Impressive 3rd Quarter, Brooks Running Experiences Double-Digit Revenue Growth
Adidas (ADDYY) reported Q3 ’17 sales those rose 9% YOY (to $6.6 billion) and profit that increased 30% YOY (to $610 million), driven by growth in China (+28%) and the North America (+31%). The company experienced double-digit growth within its running and outdoor categories and with its Adidas Originals and Neo fashion lines. CEO Kasper Rorsted reiterated full year sales (+ 17%-19%) and income (+26%-28%) forecasts, which the company raised back in July, and said he is “quite optimistic” 4th quarter growth would outperform previous years.
Howie Long-Short: Performance footwear may not be “in style”, but there seems to be some momentum with sales of running shoes. Adidas’ running category experienced double-digit growth during the 3rd quarter and Brooks Running, which creates sneakers for avid runners, grew its revenue 14% during the same time. The Berkshire Hathaway subsidiary now generates 30% of its revenue from e-commerce sales, has expanded in to China and Brazil (after showing success in Europe, Japan and Canada) and is working to grow brand awareness within a younger demographic (25-35). I like what BRK.A is doing with this niche footwear brand.
Fan Marino: ADDYY has released a highly personalized new app that includes a custom news feed, chatbot (to answer questions) and full online store; with Joseph Godsey, global head of digital commerce saying the personalized experience is “meaningful enough” to bring consumers back. Perhaps it is, e-commerce sales grew 39% during the quarter. It had better be if the company is to hit its goal of $4 billion euros in e-commerce sales by 2020; the company only reached $1 billion in online sales in 2016.
Editor Note: The summary for this story was co-written by our friends at The Water Coolest. Check out TheWaterCoolest.com for the latest market news and professional advice.
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