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Looks Like Dumping TaylorMade Is Working for adidas

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It appears dumping Taylormade was just what the doctor ordered for adidas. They're growing and taking a BIG chunk out of key competitors Nike and Under Armour in North America...

 

 

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From Bloomberg....

 

Even Adidas AG can stumble sometimes as it gains ground on sporting-goods market leader Nike Inc.

 

The German company's growth slowed faster than analysts expected in the third quarter, sending the shares to their steepest drop in 12 weeks. Sales of basketball and soccer gear fell after sponsorship contracts ended and the company stepped up plans to trim its store network in Russia after business declined there.

 

“Some market participants might be concerned by the slower top-line momentum,” Warburg Research analyst Joerg Philipp Frey said in a note. The shares traded as much as 3.8 percent lower in Frankfurt, the biggest intraday drop since August.

While overall revenue still advanced by 8.7 percent, that was less than half the pace of the second quarter. Operating profit rose by more than one-third to 795 million euros ($923 million), beating analyst expectations, as the company sold more expensive products. Revenue in North America grew by nearly one-fifth to 1.1 billion euros, an all-time high, while growth slowed in western Europe, still the company's biggest market.

 

“So far we have grown every quarter this year with 30 percent-plus in the U.S., and we are not seeing any slowdown,” Chief Executive Officer Kasper Rorsted said in an interview with Bloomberg TV. “We continue to see very, very strong demand for our products, and we continue to expect a very strong fourth quarter. It's clear we are gaining market share in the U.S.”

 

The sporting-goods industry this year has been a tale of divergence. Under Armour Inc. posted its first sales decline since it went public last month, while Puma SE, like Adidas, is benefiting from a trend toward more sportswear worn outside of gyms, prompting it to lift its profit forecast three times this year. Amazon.com Inc. is also moving into private-label sportswear, setting the stage for further upheaval in the U.S., where Adidas's Reebok brand is already struggling to turn a profit.

‘Big Enough'

 

“Overall the market is big enough also for an Amazon moving into this market,” Rorsted said in the interview. “We think that will not change the market fundamentally, but we are seeing the consumers going online.”

 

Revenue generated from electronic commerce advanced by more than one-third in the quarter, the company said. While sales of Adidas-brand products jumped 10 percent, those of Reebok declined, and Rorsted said it may take until next year for the brand to grow again.

 

“The rate of revenue and earnings growth is likely to moderate after two and a half years of super-cycle,” Piral Dadhania, an analyst at RBC Europe, wrote in a note. “We believe the quality of the margin and profit beat should be well-received by the market.”

 

Japan and Russia were the only regions where the company's revenue fell in the quarter. Rorsted stepped up efforts to stem that trend by closing about 200 stores in Russia, up from an earlier target of 150. He said he doesn't expect fundamentals in Russia to improve much before oil prices rise and sanctions are lifted. By contrast, the company plans to add about 2,000 stores in China by 2020.

 

 

https://www.bloomberg.com/news/articles/2017-11-09/adidas-outruns-nike-even-as-third-quarter-revenue-growth-slows?cmpid=socialflow-twitter-business&utm_content=business&utm_campaign=socialflow-organic&utm_source=twitter&utm_medium=social

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I realize this is news in the Golf World so it belongs here but I have big problems with Adidas right now due to issues in another sport.

 

 

Sent from my iPhone using MyGolfSpy

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I realize this is news in the Golf World so it belongs here but I have big problems with Adidas right now due to issues in another sport.

 

 

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Same here.....same issue.....will not be purchasing any adidas in the future.

 

 

Sent from my iPad using MyGolfSpy

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That stuff is unavoidable. Been happening since the UNLV glory days when I lived in Vegas. They're getting them before HS, the entire AAU program is just a shopping ground for Nike, Adidas, etc. to find their next big endorsement.

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Yes - that's the issue - I'm out on Adidas for that reason and yes yungkory you are most likely correct. But murder has been going on since Cain and Able - it wasn't right then and it isn't now.

 

Same with this.

 

 

Sent from my iPhone using MyGolfSpy

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Thanks for the info- good thing they dumped TM- now I can buy the equipment without conflict of conscience.

FTR- I agree with Rev & Foz.

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Lol if you're boycotting Adidas you need to pretty much boycott every single sporting goods company.

 

College athletics is a complete sham

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Getting back to the origins of the thread, dumping TaylorMade was a great move. Adidas is on fire right now and making Nike look like your father's sportswear.

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... I would not want to be a golf equipment OEM today. Product cycles are killing retail stores as well as the OEM's themselves. $ year cycle was great but even a 2 year cycle is doable. An every year or twice a year cycle is insane. When I was interviewing an OEM at their plant, they had 4 years of product in their cue. Names, designs, everything and admittedly 2 of those years were just tweaks of the existing design. It wasn't until year 3 that they had a technical improvement that they were still working on. 

... One of the big culprits was the Golf Magazine ratings. Worldwide if they don't have a new product and it isn't rated in the top 2 categories, they lose a ton of business. They tried it one year and took a big financial hit. Crazy how they killed the goose that laid the golden egg. People can blame TM, but if they didn't do it, another OEM would have. 

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I'm all set with Addias...the basketball shoe issue, paying college kids to go to schools with their contract just soured me.  I value ethics in business.

 

Footjoy shoes and Under Armour shirts work just fine.

 

Jim, the retired GC Super

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Lol if you're boycotting Adidas you need to pretty much boycott every single sporting goods company.

 

College athletics is a complete sham

So true -

 

 

 

 

Sent from my iPhone using MyGolfSpy

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