In early 2012, adidas AG (ADS GR) unveiled their “Boost” technology at a global event in New York City. Since then, the share price has tripled with growth accelerating dramatically from 2015 with the introduction of hip-hop culture in the brand led by celebrity endorsements from the likes of rapper, Kanye West.

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Much of this success can be attributed to the revival of the AG (ADS GR) unveiled their “Boost” technology at a global event in New York City. Since then, the share price has tripled with growth accelerating dramatically from 2015 with the introduction of hip-hop culture in the brand led by celebrity endorsements from the likes of rapper, Kanye West. Much of this success can be attributed to the revival of the adidas brand amongst both athletes, celebrities and fashion-minded consumers. Other collaborations with designer, Alexander Wang and musician, Pharrell Williams have helped the adidas lifestyle brand grow revenues by 45% in 2016.

More than just adidas

adidas was founded in 1924 but was only registered as the “adidas” brand in 1949. The group consists of other brands such as Reebok, TaylorMade – adidas Golf and CCM Hockey. It has recently acquired mobile fitness company, Runtastic for US$239 million and has also had a long-standing minority interest in German football club, FC Bayern Munich.

adidas achieved a record €19.3 billion in revenue for the 2016 year, an increase of 18% over 2015. Gross margins grew 30 basis points to 48.6% since the previous year and significantly improved its net income by 41.0% to €1.02 billion. The company is growing across all its major categories and geographies including North America, where it has lagged both NIKE and more recently, Under Armour. It expects to reach sales of between €25 billion and €27 billion by 2020 including €4 billion in sales from e-commerce channels.

BOOST technology driving growth

More than half of the sales generated by adidas are sourced from the sale of footwear products. In a highly competitive market, adidas has flourished following the introduction of Boost, a new technology featured in mid-soles of their footwear.

One or more of AtlasTrend’s managed funds own adidas shares.

 

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