Adidas has released its 2016 financial report on Wednesday and the results are very, very good. In fact, it was "exceptionally successful," according to the sports brand, with revenues rising by 14 percent and passing the one-billion-euro mark for the first time in its company's history.
As a result, Adidas won't be slowing down anytime soon. Instead, the company has increased its sales and earnings guidance and plans to strongly accelerate its growth until 2020. It expects to see sales grow between 10 percent and 12 percent on average per year over the next three years, which was previously estimated at only a high-single-digit rate. Net income will also grow between 20 percent and 22 percent on average per year (as opposed to a predicted increase around 15 percent) until 2020.
"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 Kasper Rorsted, CEO of adidas AG, in an official statement. "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."
"Creating the New" was presented by Adidas back in March 2015 and focuses on speedy production, metropolitan cities and "open source," which encompasses outside partnerships like Yeezy and Alexander Wang's Adidas Originals collaboration. Moving forward, Rorsted plans to supplement this strategy by bettering the company's corporate culture, as well as its digital presence (with e-commerce sales expected to hit four billion euros by 2020) and technologies, such as 3-D printing.
The German-based company will also invest it efforts in the North American market, which experienced double-digit growth at 24 percent, making Adidas one of the fastest-growing brands in the U.S. over the last year. Rorsted and his team will also push its "One Adidas" initiative by simplifying its business processes, along with editing down the Adidas portfolio. Currently, the company is seeking a buyer for its golf brands and is now putting up its ice hockey brand CCM Hockey for sale.