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.
The group also issued upgraded longer-term financial guidance that sees sales rising between 10% and 12%, on average, between 2015 and 2020 with net income rising by an average of 20% to 22%. Adidas also said revenues from e-commerce will reach €4 billion ($4.22 billion) by 2020.
Adidas shares rose 7% in the opening hour of trading in Frankfurt to change hands at €170.75 each, extending their three-month gain past 19%, outpacing the 8.54% gain for Nike (NKE) and far ahead of the 39% slide for Under Armour (UAA) .
"Our 2016 results and our positive outlook for 2017 are proof that our strategy is paying off. After the first full year of 'Creating the New', we have exceeded our original plan," said new CEO Kasper Rorsted. "Now we have developed additional initiatives which will accelerate the execution of 'Creating the New' and enable us to significantly increase our targets for 2020."
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.
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.