Nike shares surge as return of pro sports boosts outlook

NEW YORK - Shares of Nike skyrocketed Thursday on blowout earnings propelled by gains in direct sales to consumers and positive momentum from the return of professional sports.

The sportswear giant scored record quarterly revenue earnings in North America and also benefited from a big jump in sales in Europe, Middle East and Africa compared to the same period last year, when COVID-19 restrictions were most severe.

Higher revenues also helped offset the effects of higher spending on marketing in connection with major sporting events such as this month's NBA playoffs and Euro 2020, where the company is a sponsor of Cristiano Ronaldo and of several teams still in contention.

"We're proud that more goals have been scored using Nike boots than all the others combined," said Chief Executive John Donahoe on an earnings conference call.

Nike's profits for the quarter ending May 31 was $1.5 billion, compared with a loss of $790 million a year ago.

Revenue nearly doubled to $12.3 billion.

Executives also outlined a plan for strong performance through fiscal 2025, projecting annual sales growth of high single digit to low double digit growth. 

The outlook reflects the benefit of investments in Nike's direct-to-consumer efforts, which have accelerated during the pandemic and as some traditional retailers have gone out of business.

The company forecasts fiscal 2022 sales of more than $50 billion, said Chief Financial Officer Matt Friend.

Shares jumped 12.1 percent to $149.71 in after-hours trading.

Agence France-Presse

Adidas mulling sale of Reebok

FRANKFURT - German sportswear giant Adidas said Monday it was mulling a sale of its long-struggling US subsidiary Reebok.

"Adidas has begun to assess strategic alternatives for Reebok," the company said in a statement, adding these "include both a potential sale of Reebok as well as Reebok remaining a part of the company".

A decision will be announced on March 10, it added, when the group will present a new five-year strategy.

Adidas acquired Boston-based Reebok in 2006 for 3.1 billion euros ($3.8 billion) to take on US rival Nike. But the brand has struggled to grow under its German owner, frequently fueling speculation of a sale.

The brand is now worth only 803 million euros, after several accounting write-downs, the last of which occurred in August after a 42 percent drop in sales in the second quarter to 228 million euros.

Germany's Manager Magazin reported in October that China's Anta Sports and North Face owner VF Corp. were interested in acquiring Reebok.

As far back as 2017, Adidas chief executive Kasper Rorsted had to face down shareholders calling for the sale of then loss-making Reebok.

A turnaround plan initiated in 2016 reversed declining sales by 2019, before the pandemic forced store closures and halted the momentum.

At the peak of the coronavirus restrictions in the second quarter, the Adidas group was forced to close around 70 percent of its stores worldwide. 

With sales of 1.75 billion euros in 2019, up two percent on the year before, Reebok accounted for just a fraction of the Adidas group's 23.6 billion euros in revenues last year.

Adidas at 1430 GMT traded up almost 1.7 percent at 288 euros on news of a potential sale, compared with a 1.0 percent rise in Frankfurt's blue-chip Dax index as a whole.

Agence France-Presse

Nike to close all stores in US and several other countries

US sportswear giant Nike Inc said on Sunday it is closing all of its stores in the United States and several other countries to limit the spread of the coronavirus.

Nike stores in Canada, Western Europe, Australia and New Zealand will be closed from March 16 to 27, the company said in a statement.

However, Nike-owned stores in South Korea, Japan, most of China and in many other countries are currently open and will continue their normal operations.

"We are taking additional steps in other Nike-managed facilities, including the option to work from home," it added.

Earlier this month Nike had temporarily closed its European headquarters in Netherlands after an employee was infected with the coronavirus.

Apparel retailer Urban Outfitters Inc, which owns brands including Anthropologie and Free People, said on Saturday it was closing all its consumer stores worldwide until at least March 28.

However, retailers including Macy's Inc, Saks Fifth Avenue and Gap Inc's Banana Republic sent notices to shoppers last week saying they were open for business in a move to stem losses due to a steep drop in store traffic.

(Reporting by Maria Ponnezhath in Bengaluru; Editing by Edmund Blair and Lisa Shumaker)

Nike earnings jump as strong pricing offsets tariff hit

NEW YORK -- Nike reported a jump in quarterly earnings on Thursday as strong pricing and increased direct sales helped offset a hit from US trade tariffs.

The sports apparel giant notched a 31.6 percent increase in fiscal second-quarter profits to $1.1 billion.

Revenues surged 10.2 percent to $10.3 billion behind double-digit increases in Greater China and other regions outside its home market. North American sales rose about five percent.

Gross profit margins rose due to higher pricing in the Converse brand and in direct sales to customers following heavy investment in smartphone applications and other technologies.

Those gains were offset somewhat by higher costs following US tariffs on Chinese imports on some footwear and apparel that took effect during the quarter.

President Donald Trump last week called off an additional round of tariffs on Chinese goods that had threatened additional Nike products.

Chief Financial Officer Andy Campion said the results reflected the success of "strategic and targeted investment in our digital transformation."

The sports giant announced in October that Mark Parker would step down as chief executive in January and be replaced by former eBay chief executive John Donahoe. Parker will stay on as executive chairman.

Shares of Nike slipped 0.6 percent in after-hours trading to $100.53.

Agence France-Presse

Adidas has eyes on 2019 finish line after Q3 profit slip

FRANKFURT -- German sportswear maker Adidas said Wednesday it was confident of hitting full-year financial targets after a profit slip in the third quarter, buoyed by fast-rising sales.

In July-September, Adidas' bottom line fell back 1.8 percent year-on-year, to 646 million euros ($715 million), slightly beating forecasts from analysts surveyed by Factset.

But revenues surged 9.1 percent to 6.4 billion euros.

Double-digit growth in China and North America was Adidas' biggest sales driver, while Europe inched up more tentatively.

Its flagship brand with the three stripes sold 6 percent more even in a year without mammoth sporting events, while struggling US subsidiary Reebok also lifted sales slightly.

Meanwhile growth in online sales slowed to 14 percent in the third quarter, compared with 76 percent a year before.

Despite the growth, operating, or underlying profit at Adidas also fell back, shedding 0.3 percent to reach 897 million euros.

The operating result was weighed down by advertising costs as the company looks to rev up sales in the second half of the year.

"We confirm our full-year outlook and remain confident about a significant top-line acceleration during the fourth quarter," chief executive Kasper Rorsted said in a statement.

The Bavarian group expects to make net profits between 1.88 and 1.95 billion euros this year, up between 10 and 14 percent on 2018's result.

source: news.abs-cbn.com

Nike touts digital strategy as profits rise

NEW YORK -- Nike shares surged Thursday as the company reported higher earnings, announced a new share buyback program and talked up its ambitious digital investment program that emphasizes direct selling to consumers.

Nike reported earnings of $1.1 billion in its fiscal fourth quarter, up 12.8 percent from the year-ago period.

Revenues also rose 12.8 percent to $9.8 billion. The company bested analyst expectations in both earnings per share and revenues.

China was the company's strongest region in terms of revenue gains, where sales jumped 35 percent. 

Sales in North America rose by a more modest three percent, but that was still an improvement after the decline in the prior quarter. Chief executive Mark Parker said North America has "sustainable" momentum heading into its fiscal 2019.

Revenues in Nike's home region have been pressured by store liquidations and retailer turmoil that had led to a glut of apparel and shoes on the market. 

But retail analysts say market conditions have improved of late.

Nike has also bolstered its direct selling initiatives, while spending more on sports marketing and product launches.

Executives expressed confidence in the digital strategy, with some new marketing campaigns generating hundreds of millions of social media impressions and the company seeing strong growth of its Nike Plus application. 

Nike is learning to calibrate output of goods and categories based on consumer interest, what executives called "demand sensing." 

Parker said a partnership with Amazon was "progressing well," although the venture is at an earlier stage compared with collaborations some other platforms, such as the Chinese website Tmall.

"We remain focused on elevating consumer experience on the platform," Parker said of the Amazon venture. "We're learning a lot."

The company also announced a new $15 billion share repurchase program in the wake of US tax reform in December that has resulted in a much lower tax rate.

Shares of Dow member Nike surged 9.2 percent to $78.30 in after-hours trading.

source: news.abs-cbn.com

FOOTBALL: Adidas sets sights on football stars in big U.S. drive

BERLIN - Adidas wants to sign dozens of deals with U.S. sports stars in coming years, hoping that will provide a more lasting boost to sales than the current fashion fad for its retro sneakers, its North America head told Reuters.

Since falling into third place in the United States behind Nike and Under Armour, the German firm has regained some ground in recent months after raising marketing spending in the world's top sportswear market.

Mark King has put a big focus on signing top athletes in sports like American football, basketball and baseball since he took over as president of the region for Adidas in 2014, after more than a decade running the company's golf business.

He said Adidas wants to sponsor 250 National Football League (NFL) players by 2020, up from 95 now, plus 100 National Basketball Association players (NBA), up from about 70 now.

"When you do well in football in the United States, it is like doing well in soccer in Germany," King, an American who appeared as a business role model on reality show "The Apprentice", said in a phone interview.

"The more grounded that we are in America, in American sports, the more success we're going to have."

Adidas this month reported a 31 percent jump in first-quarter sales of its core brand in North America, driven by the popularity of retro shoes such as Superstar and Stan Smith.

But some analysts are concerned that the company could be left exposed to the fickle winds of fashion fads if it does not do more to establish its credentials in U.S. sports.

"The risk is that it is very easy to make the brand tired when focusing too much on fashion. Adidas is definitely hot in the United States now, but it is hot in fashion and fashion can fade away," said Berenberg analyst Zuzanna Pusz.

'WINNING LOCKER ROOM'

King said he was firmly focused on "winning the locker room" but wants to tie performance and lifestyle together: "We're a brand that can take care of you when you play your game and we can also make you look cool when you come off the pitch."

Adidas has already lured some top athletes away from Nike, including Aaron Rodgers of the Green Bay Packers football team and James Harden of the Houston Rockets, helping the brand regain popularity among its main target audience of 14-18 year-olds.

The drive to sign hundreds of U.S. sports stars comes at a time that Nike is threatening Adidas' dominance in the soccer business, reportedly being on the brink of replacing the German firm as shirt sponsors for English side Chelsea.

King said Adidas' market share for American football cleats, or studded shoes, had already risen significantly, helped by a partnership with rapper Snoop Dogg who launched eye-catching shoes in March with a dollar bill pattern and shiny gold soles.

While basketball is proving tougher, King said he was also optimistic. He said many retailers were keen to help the German firm break Nike's stranglehold on the sport and players were enthusiastic about his company's springy "Boost" shoe soles.

Nike's share of the U.S. sportswear market rose to 21.1 percent in 2015 from 20.1 percent in 2014, while Under Armour was up at 3.9 percent from 3.5 percent and Adidas rose to 3.4 percent from 3.3 percent, according to Euromonitor data.

Adidas fell behind Under Armour in 2014 after spending years in the No.2 spot behind leader Nike.

After years of trying to steer its U.S. business from its headquarters in southern Germany, Adidas has given King more autonomy and has moved top executives, marketers and designers to the firm's U.S. base in Portland, also home to Nike.

It is designing more shoes specifically for the U.S. market and has poached three top footwear designers from Nike, who will run a new creative studio in Brooklyn, New York, to be opened in September.

Adidas has already had strong feedback from retailers for running models due to hit stores early next year and priced at between $80 and $100, less expensive than most of its shoes.

King said these lower-priced running shoes would be a major driver of growth for the company. "Retail customers are starting to feel like Adidas is part of the American business and not imported from somewhere outside." (Editing by Pravin Char)

source: www.abs-cbnnews.com

Manchester United agree record $1.3-B Adidas kit deal

LONDON - Adidas AG will pay a record 750 million pounds ($1.3 billion) to supply Manchester United with shirts and kit, underlining the enduring pulling power of the former English soccer champions despite a dismal last season.

The 10-year agreement announced on Monday is a world record for a soccer club and more than double the previous biggest, a 31 million pounds-a-year deal the German sportswear company is reported to have with Spanish side Real Madrid.

Its total value is also just 40 million pounds less than United's owners the Glazer family paid for the club in 2005, highlighting how it will help to underwrite the rebuilding of the team under new manager Louis van Gaal.

The Dutchman takes charge of the Old Trafford club on Wednesday just days after leading the Netherlands to third place at the World Cup.

Nike, the world's largest sportswear group, had sponsored United since 2002 but earlier this month pulled out of a bidding war with Adidas, meaning the 2014-15 season will be the U.S. firm's last as a partner of the 20-time English champions.

Adidas, which also has similar deals with elite European clubs including England's Chelsea, Germany's Bayern Munich and Italy's AC Milan, takes over the contract from 2015/16.

The deal with arguably the world's most popular team is a coup for the German firm, protecting its leading position in a soccer market in which Nike has made strong inroads over the last 20 years.

"This collaboration marks a milestone for us when it comes to merchandising potential. We expect total sales to reach 1.5 billion pounds during the duration of our partnership," Adidas chief executive Herbert Hainer said in a statement.

Its lucrative value also points to the continued prominence of the United brand despite a 2013/4 campaign - its first without influential manager Alex Ferguson who retired after 26 years in May 2013 - that saw the club finish seventh in the league and miss out on a Champions League spot for the first time in 19 years.

The allure of the club's famous red shirts, worn by millions around the globe, had already helped persuade General Motors to put its Chevrolet brand on the team's jerseys in a deal worth $559 million that will run until 2021.

That agreement - double the going rate for most major European teams - will see Chevrolet on the front of United shirts from this season in Nike's swansong campaign.

Van Gaal, who replaces David Moyes as manager after the Scot parted company with the club less than 10 months into his tenure, will spend two days at United's training complex before flying to Los Angeles with the team on Friday.

Nike was also recently replaced by United's league rivals Arsenal, who have signed a kit supplier deal with Germany's Puma , the third-ranked company in the market, worth a reported 30 million pounds a year.

Shares in Adidas were up 2.5 percent to 73.31 euros at 1332 GMT, with United shares flat at $17.8.

($1 = 0.5877 British Pounds) (Editing by Kate Holton and John Stonestreet)

source: www.abs-cbnnews.com

Adidas unveils smartwatch for runners

MANILA - German sportswear manufacturer adidas unveiled its company's first entry into the world of smartwatches with a device that boasts to have everything a runner needs.


The miCoach Smart Run, priced at P19,995, enables runners to track their runs using GPS mapping, monitor their heart rate directly from their wrist, get real-time coaching advice and even play their favorite tunes.

"By combining the latest innovations, such as the Mio Wrist Based Continuous Heart Rate Technology, design and ease of use navigation, we consciously defied the rules that define other running watches," said Simon Drabble, director of miCoach at adidas.

The Android-powered smartwatch also features the miCoach system which can be synced with adidas' web platform through WLAN to make personalizing workout sessions more easier.

"As part of the miCoach training system, it truly unlocks the runner’s full potential by making smart training easy and accessible. Whether you’re starting a new running program, training for a 10k or competing in another marathon, miCoach SMART RUN will make your training more efficient so you get the results you want,” added Drabble.

The Smart Run weighs 80 grams and has a 1.45 inch full color transflective touch display. It is said to have a battery life of 4 hours with coaching and music and up to 14 days on its watch display mode.

"The completeness and simplicity of Smart Run is astounding." Terrence Mahon, Lead Endurance Coach, UK Athletics Federation said."The visual and audible guidance for interval training is a leap forward from any other watch available."

The miCoach Smart Run is available for purchase exclusively at the adidas eShop (shop.adidas.com.ph) on December 1.

source: www.abs-cbnnews.com

Nike Lunar Rift Racer

Though the barefoot essence has been channeled into the Free line and various neoprene-uppered runners, the Air Rift remains one of Nike Sportswear’s most peculiar classics.  With far more womens colorways available in recent years than mens, this ‘mitten’ of a velcro-strapped slip-on has all but faded out of the recurring lineup.  The new Nike Lunar Rift Racer seeks changes in that status in more, offering a more traditional split-less toe atop a LunarLon cushion that’s as light as the featherweight elastic upper.  Atomic Teal will be a popular color for SS13, so stick with Sneaker News to see more from the Lunar Rift Racer and let us know what you think of this first one after you’ve seen them from more angles.

source: sneakernews.com