Adidas Says UEFA Euro 2012 to Fuel Record Soccer Sales
Adidas AG (ADS), the world’s second- biggest sporting-goods maker, said it expects record soccer sales of more than 1.6 billion euros ($2 billion) this year, boosted by the European championships in Ukraine and Poland.
“Adidas is leading the way at UEFA Euro 2012 in every respect -- in terms of product sales, brand visibility and innovative strength,” Chief Executive Officer Herbert Hainer said at a press conference in Warsaw today. “Adidas can already be sure of defending its title as the most successful football brand in Europe and the world.”
Today’s forecast exceeds the previous record of 1.5 billion euros, set in 2010 when the last World Cup was held in South Africa. Soccer accounts for more than 17 percent of revenue at Herzogenaurach, Germany-based Adidas, which said in April that total sales will rise almost 10 percent this year, compared with an earlier goal for a mid-to high-single-digit percentage gain.
Adidas is defending its soccer leadership against Nike Inc., (NKE) which has a goal to surpass the company as the sport’s biggest brand and sponsored teams such as the Netherlands, Portugal, Croatia, Poland and France at this year’s tournament. Adidas controls about a third of a market it estimates is worth as much as 5 billion euros a year.
“There’s momentum with the Adidas brand in football at the moment, especially in footwear,” said Mark Josefson, an analyst at Silvia Quandt Research GmbH in Frankfurt. “Nike wanted to close the gap, but it has at best kept pace with Adidas, or has probably fallen back. Football is associated with Adidas.”
Adidas said today that it will be the soccer market leader in Poland this year and “has come significantly closer” to becoming the biggest seller of sporting goods in the country by 2015. Sales of Adidas soccer products will double this year in Ukraine, where the company is the sport’s biggest brand, it said.
“I am very happy with the business development in Poland and Ukraine,” Hainer said.
Adidas fell 0.7 percent to 58.56 euros as of 2:44 p.m. in Frankfurt trading. The stock is up 16 percent this year, among the best performers in Germany’s benchmark DAX Index.
Adidas is sponsoring six teams at the tournament, including favorites Spain and Germany, both of whom have made the quarter- finals. It is one of the 12 official sponsors of the event that also include Sony Corp. and Carlsberg A/S. (CARLA) Adidas provides the tournament’s official match ball, the Tango 12.
“Adidas not only benefits from the success of its teams, but can also position itself onscreen and on-site via the presence of officials, referees, volunteers or ball boys and girls and team mascots wearing Adidas clothing,” said Andreas Ullmann, head of market intelligence at German market researcher Sport + Markt. “There are also hospitality opportunities which can be used for competitions, promotions and networking.”
Adidas said today that it will sell more than 7 million Tango 12 balls this year and that it already sold more than 1 million Germany jerseys, a record for a European championship. The company sold “close” to 1 million Spain jerseys even in the current economic situation in the country, Hainer said.
Adidas sales will rise to 14.81 billion euros this year, according to the average estimate of 30 analysts surveyed by Bloomberg. Twenty-eight analysts recommend buying the stock while just two advise selling, data compiled by Bloomberg shows.
“Adidas still has the strongest heritage of any brand in soccer,” Ullmann said. “Adidas has strong partnerships, which have been built up over many, many years with major federations and clubs.”
Adidas is “not interested” in buying Nike Inc.’s Umbro soccer brand as Adidas is already the leader in the sport, CEO Hainer told journalists today. Nike, the world’s biggest maker of sporting goods, said in May that it will sell Umbro and Cole Haan within a year to focus on its biggest brands. Nike acquired Umbro, the U.K.-based soccer-apparel and footwear brand, in 2008 for $567 million.
Soccer “is the heart and soul of our company,” Hainer said.
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