Monday, July 25, 2011

Adidas Sees Latin America Helping It Meet 2015 Sales Target

BUENOS AIRES (Dow Jones)--German sportswear company Adidas AG (ADS.XE, ADDYY) hopes to ride its ubiquitous brand to sharply higher sales over the next five years as it piggybacks on improving lifestyles and rising disposable income in emerging markets like Latin America.

Adidas is the world's second-largest maker of sports goods by revenue after Nike Inc. (NKE), and is synonymous with soccer across much of the world.

The company is on track to meet its target to increase net profit 10% to 15% this year amid steady growth in sales, Chief Executive Herbert Hainer said in an interview with Dow Jones Newswires on Thursday.

Adidas has plans to increase its total sales 42% to 17 billion euros ($24 billion) by 2015, from EUR12 billion last year, Hainer said.

Today, Latin America accounts for about EUR1.3 billion, or 10%, of its annual sales.

While its operations are growing worldwide, the company expects brisk sales to continue in Latin America thanks to rising incomes in the soccer-mad countries.

Adidas has enjoyed eight years of double-digit sales growth in the region, said Charlie Maurath, head of Adidas Latin America, at a press conference.

The pace has been even higher in Argentina, where sales have grown at an annual rate of about 25% in the last few years, said Walter Koll, the director of Argentina operations.

This month Adidas and the Argentine Football Association, or AFA, extended their sponsorship agreement until December 2022. While Hainer said the company would like to seal a similar deal with Brazil, the hosts of the 2014 World Cup are tied up in a deal with Nike until 2018.

Adidas is set to sponsor the world's top soccer tournament for the third time in a row and is gearing up to "bring the colorfulness and culture of Brazil" into its product lineup, he added.

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