On the heels of an amazing 2016, Adidas increases its long-term guidance.
The company experienced an impressive 2016, with currency-neutral revenues for the Adidas brand rising 22 percent in FY2016 and 14 percent during the fourth quarter, with the help of double-digit sales increases in Sport Performance, Adidas Originals and Adidas Neo for the year. As for Reebok, currency-neutral sales grew 6 percent compared to last year, showing double-digit sales increases for Classics and single-digit increase in coming from the training and running categories.
As a part of a long-term strategy business plan, the company announced it will accelerate sales and earnings growth until 2020. Net income is now expected to increase between 20-22 percent on average yearly, over the next three years.
“Our 2016 results and our positive outlook for 2017 are proof that our strategy is paying off. After the first full year of ‘Creating the New’, we have exceeded our original plan,” said Kasper Rorsted, CEO of Adidas AG.“Now we have developed additional initiatives which will accelerate the execution of ‘Creating the New’ and enable us to significantly increase our targets for 2020.”
Adidas’ ‘Creating the New’ strategy, which the company presented in March 2015, attempts to elevate brand desirability, is based on the pillars of Speed, Cities and Open Source which the company continues to progress, specifically over the last two years.
However, Adidas recorded a net loss due to continuing operations of €9 million, around $9.5 million, in the fourth quarter.