Adidas Chief Executive Sees Large Growth Potential in Brazil

Date : 06/22/2012 @ 5:46AM
Source : Dow Jones News
Stock : Nike, Inc. (NKE)
Quote : 53.06  0.37 (0.70%) @ 6:03PM

Adidas Chief Executive Sees Large Growth Potential in Brazil

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   By Natali Schwab 
 

WARSAW--As the European soccer championship enters its crucial phase, Adidas AG (ADS.XE) Chief Executive Herbert Hainer's mind is already at the next important sports events.

"Our focus is on Brazil," he told journalists in Warsaw Friday. Next year, Brazil will host the Confederations Cup, followed by the soccer World Cup in 2014, and Rio de Janeiro will host the Olympic Games in 2016.

"Brazil has large potential," said Mr. Hainer. The country has 195 million inhabitants and is "mad for sports."

"I see enormous growth potential in the next five years," he said. Brazil is Adidas' largest market in Latin America. The German sportswear maker ranks second in Brazil by revenue, behind rival Nike Inc. (NKE) Mr. Hainer didn't disclose the exact sales figure for Brazil.

Adidas expects this year's revenue for soccer products to be a record 1.6 billion euros ($2.02 billion).

Mr. Hainer confirmed the company guidance for 2012.

"We expect to reach our forecast," he said. Adidas had raised guidance after a good first quarter. The company expects 2012 to be a record year with currency-adjusted revenue increasing by almost 10%. Net profit is forecast to rise by 12% to 17%.

Mr. Hainer's caution can be explained by the economic weakness in southern Europe. However, the weakness hasn't had a major effect on Adidas' business performance so far.

Adidas wants its subsidiary Reebok to return to growth next year. In 2012, business will be negatively affected by the expiry of a license agreement with the U.S. National Football League and a weakening sales trend for toning shoes.

Write to Natali Schwab at natali.schwab@dowjones.com

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