Adidas chief vows to step up fight against Nike

The chief executive of Adidas vowed to intensify the sportswear group's efforts to claw back lost ground in the US in its battle with market share for Nike as the group announced figures for the third quarter that were better than expected.

Herbert Hainer, head of the German-based company, said the group had been "aggressively addressing" its main challenges, in particular intensifying efforts to revive growth in the US.

"In North America, regaining our form in this market is the top priority," he said.

Shares in Adidas rose 5.8 per cent to €60.06 in lunchtime trading after it reported third quarter sales that beat expectations - even though the sportswear group also warned that revenue growth would slow next year.

Shareholders had been braced for a significant fall in net income and profitability at the German company, which issued a profit warning over the summer due to sliding sales at its US golf division and exposure to Russia's economic turmoil as well as currency effects.

The figures were not as bad as feared, however, with operating profit down 13 per cent in the third quarter to €405m, and net income falling 11 per cent to €282m, better than the predicted 15 per cent drop.

However, Mr Hainer warned that revenues would grow at mid-single digits in 2015, compared with a projected mid-to-high single-digit rate this year.

Shareholders have expressed frustration with the company, pointing in particular at Adidas's handling of its TaylorMade golf division, where the group has been criticised for pushing too much product into a market that was already struggling, leading to heavy discounting. 

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Adidas also announced in August that it would scale back expansion plans in Russia, one of its top three markets, as the weaker rouble has hurt sales.

A €1.5bn share buyback - which will start on Friday and last until the end of January - failed to spark a rally in Adidas stock when it was announced in October. The shares have fallen 37 per cent this year. Shareholders are awaiting details of the group's new financial targets after it admitted over the summer it would miss its goals for 2015.

Revenues were up 6 per cent to €4.1bn between July and September compared to the previous year, a 9 per cent increase when adjusted for currency effects. Analysts had expected a 4 per cent rise.

Operating margin - a key measure of success for Adidas - fell to 9.8 per cent in the third quarter from 11.9 per cent last year. The group warned over the summer that it expects operating margin to be between 6.5 and 7 per cent this year, down from 8.7 per cent last year. It had previously targeted an 11 per cent operating margin and €17bn in global sales by the end of 2015. 

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