Adidas AG (ADDYY) shares surged in Frankfurt Wednesday after the sportswear group boosted 2017 sales targets and vowed to maintain focus on the U.S. market after a mixed set of full year earnings.
Adidas said full year revenues for 2016 came in at €19.3 billion, modestly shy of analysts' forecasts of €20 billion but still 18% higher than 2015 on a currency neutral basis. Underlying net income was tabbed at €1.019 billion, largely in line with a company-compiled forecast of €1.003 billion. Management also proposed a full-year dividend of €2 per share, up 25% from 2015.
Adidas shares rose more than 8.2% in early trading to change hands at €173.02 each in Frankfurt, extending their three-month gain past 20%, outpacing the 8.54% gain for Nike (NKE) and far ahead of the 39% slide for Under Armour (UAA) .
"2016 was an exceptional year for adidas. We have improved the desirability of our brands and products around the globe," said CEO Kasper Rorsted. "As a consequence, we were able to increase revenues strongly and achieve a record net income of more than € 1 billion for the first time in the history of our company."
"These results are proof positive that our strategy 'Creating the New' is paying off," Rorsted said. "Building on our 2016 performance, our momentum continues and we will again achieve strong top- and bottom-line improvements in 2017."
Adidas said it expects 2017 sales to increase between 11% and 13% and improve its operating margin, which came in at 7.7% in 2016, to between 8.3% and 8.5%. It's also aiming to increase net profit as much as 20% to €1.225 billion.
