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Mon, Aug 28, 2017
Vol 1, Issue No. 33

Adidas Eyes ‘Significant’ Topline Q4 Acceleration; Closing Speedfactories

The Three Stripes, citing the discontinuation of supply chain shortages and easier year-over-year comparisons, is poised for sales growth in Q4 that will help the company meet its FY19 outlook of 5 to 8 percent revenue expansion (likely coming in at 6.5 percent) and a gross margin slightly above 52 percent. During the FY’s final period, Adidas intends to introduce its first Beyoncé products under two labels in a controlled fashion as development on its next five-year (2021-25) strategy continues ahead of a planned Nov. 2020 unveiling.

In a separate development first reported by Reuters earlier today, Adidas will shutter Speedfactory robotic-driven factories in Ansbach, Germany and near Atlanta by April 2020 and relocate the technologies and learnings to factories in Asia. Initially, the company had planned a series of Speedfactory sites worldwide as a means of accelerating faster delivery of new styles into major markets and offsetting higher labor and shipping costs out of Asia.

Brian Grevy.

New Supervisory Board member Brian Grevy, 48, a former Adidas executive who most recently has been CEO of Gant, is expected to play a role in crafting the company’s go-forward approach.

In 2020, ahead of the new five-year plan, CEO Kasper Rorsted says Adidas will continue to increase its marketing investment above prior year levels, “tackle challenges decisively,” and focus on “multiple dimensions of innovation.” The latter is expected to include more customized Boost products and sustainable-related offerings like the new 100-percent adidas by Stella McCartney Infinite Hoodie (photo above).

North American sales rose 16 percent in euros to the equivalent of $1.62 billon in Q3 ended Sep. 30 with adidas brand sales up 15 percent to $1.48 billion and Reebok sales rising 23 percent to $139.9 million. Globally, Adidas footwear sales stepped 4 percent higher to $3.84 billion without growth from the Yeezy franchise that faced a difficult year-over-year comparison, and 17 percent expansion in apparel to $2.89 billion.

In other footwear news,

  • Mizuno reported 11.8 percent growth in Americas’ revenues in Q2 to the equivalent of $95.1 million as footwear grew 14.7 percent in Yen to the equivalent of $35.7 million and apparel sales were flat at $14.6 million. The company said the region’s running shoe market has shown signs of recovery and attributed the topline growth to strong running and golf sales.
  • Salomon’s product team has spent 18 months developing a fully recyclable shoe concept—a performance running shoe that can be recycled and re-used in ski boot production. The Concept Shoe is made completely of TPU and allows the company to extend the life cycle of the materials by more than double. Salomon is working to implement elements of the concept into running shoes for 2021.