Adidas commits to 3 billion Euro buyback by 2021
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Adidas commits to 3 billion Euro buyback by 2021

German athleisure firm Adidas has announced that it will buy back as much as €3 billion in the next three years. In an announcement released Tuesday, Adidas said that its supervisory board has approved a plan to repurchase the shares by May 2021. The plan kicks off on March 22, and the company expects to purchase a full billion Euros this year – that’s on top of an annual dividend of 30% to 50% of net income from continuing operations.

Adidas’ share price has inched up by 1% so far this year

graph 1503 adidas

 

SOURCE: Yahoo Finance

Adidas’ chief financial officer, Harm Ohlmeyer, made the following comment about the buyback: "The sizable multi-year buyback program announced today shows the confidence in our strategy 'Creating the New'. We will continue to relentlessly drive operating cash flow, while at the same time investing back into our company to provide for future growth. The buyback complements our stated dividend policy, underscoring our commitment to continuous shareholder return."

CEO Kasper Rorsted is on a mission to increase the company’s sales to €26 billion by 2020, along with lifting the company’s operating margin to 11%.  He’s hoping that Adidas can close the distance with Nike, its bigger rival.

Although Adidas’ share price has failed to ascend so far this year, it has experienced some strong growth in recent quarters. Analysts expect this to continue when it releases full-year and fourth quarter earnings, and have pegged consensus estimates of a 17% to 19% rise in sales, year on year.

Disclosure

Dominion holds Adidas in its Global Trends Luxury Fund.


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