Reuters/Stefanie Loos
The German sportswear giant is increasing its focus on the US market, where it's taking the fight to its rivals Nike and Under Armour.
Adidas has been on a tear as of late, riding the tide of better-performing lifestyle products like its Originals, Neo, and Y3 lines. According to Bloomberg, sales of those categories rose 45% in 2016, amid a slump in traditional performance-oriented sportswear.
"The lifestyle market is a lot bigger than the sports market, so we have to participate in that," outgoing CFO Robin Stalker said at a press conference. "There are the Stan Smiths and Superstars, but there are also other products we will manage over many seasons.'"
Casualwear is now 30% of Adidas' sales, which is indicative of broader industry trends that have consumers shifting away from the performance-oriented offerings of brands like Under Armour.
The focus on the US market makes sense for Adidas, as it's one of the largest in the world for sportswear. Roughly 85% of Under Armour's revenue comes from North America. The US is also the only market where Adidas trails sportswear leader Nike by a significant market share, and it's looking to make up some ground with its new initiatives.
AP/Michel Euler
Adidas said it is looking to adopt a model that's similar to fast-fashion houses, where product can be ordered based on demand instead of in bulk. It also aims to quadruple its online sales to 4 billion euros by 2020. The brand said it is looking to offload its non-core businesses, like its Taylormade golf products and the hockey brand equipment brand CCM, so it can focus on the namesake brand and a still-struggling Reebok.
The company raised its outlook ahead of its 2016 earnings announcements, saying it expects profits to raise in the low 20% range each year until 2020.