Adidas ups 2011 sales goal as consumers spend more

Tuesday, 8 March 2011 00:01 - - {{hitsCtrl.values.hits}}

Reuters) - Adidas, the world's second largest sporting goods company after Nike, increased its sales goal for 2011 on the back of rising consumer confidence and emerging markets growth.

"2011 is shaping up to be another great year for the Adidas Group and we are off to a fast start," Chief Executive Herbert Hainer said after the group reported record sales of 11.99 billion euros ($16.56 billion) for 2010.

As part of a strategy to grow faster than the market over the period to 2015, Adidas is concentrating on North American high school consumers, Russia and China.

The German company with the three stripes logo said however that higher raw material costs would offset improved margins from its network of own stores, meaning group gross margins would remain flat in 2011.

High commodities prices are affecting a variety of companies, from consumer goods group such as Henkel to clothing manufacturers and chemicals firms like AB Foods and BASF.

Hainer told Reuters last month that higher raw material prices would not stop Adidas from growing in 2011.

Adidas also more than doubled its dividend to 0.80 euros per share for 2010 as it reported sales up 9 percent on a currency neutral basis and operating profit of 894 million euros.

Analysts had been expecting 2010 operating profit of 893 million euros on sales of 11.67 billion, and a dividend of 0.64 euros according to a Reuters poll.

The group, based in the same southern German town as arch-rival Puma, said it expected 2011 sales to grow at a mid to high single digit rate, improving on its previous guidance for a growth rate in the mid single digits.