Adidas presents a new five-year-plan

The German sporting goods manufacturer Adidas (OTC: ADDYY) wants to double its e-commerce sales by 2025 and make its products more sustainable. This is part of a five-year plan to bring profitability closer to that of rival Nike (NYSE: NKE). <% {"companyName": "CompanyName", "companyTickerSymbol": "TWTR:NYSE", "name": "BoxNewsletter"} %> <% {"companyName": "CompanyName", "companyTickerSymbol": "TWTR:NYSE", "name": "BoxNewsletterUnder"} %> <% {"companyName": "CompanyName", "link": "link", "name": "BoxPdfReport"} %> <% {"headline": "Headline", "link": "link", "name": "BoxSeenNews"} %> <% {"companyName": "CompanyName", "companyTickerSymbol": "TWTR:NYSE", "companyWKN": "companyWKN", "targetPrice": "22.90", "name": "BoxTargetPrice"} %> <% {"tickerSymbolOne": "TWTR:NYSE", "tickerSymbolOneTwo": "TWTR:NYSE", "name": "BoxTickerSymbol"} %> Adidas is targeting online sales of up to 9 billion euros ($ 10.7 billion) per year by 2025, with an operating profit margin of 12-14%, down from 11.3% in 2019, before the Coronavirus crisis affected sales and profitability. The company has reopened 95% of its stores after coronavirus closings, it said on Wednesday as it forecast mid-to-high tens sales growth in 2021, rising as high as 30% in greater China, the rest of Asia and Latin America should. Adidas shares rose 3.2% to 1250 GMT, the largest gain in the German blue chip index. While the sporting goods industry has suffered from store closings during the COVID-19 pandemic, it has managed to sell more online as more people started running, hiking and yoga during the closings. Nike, the world's largest sportswear brand, has stated that people have enrolled en masse to their workout and store apps, which has resulted in significantly higher online sales over the past year. Adidas will invest more than 1 billion euros in its digital transformation by 2025, including making its supply chain more agile so that online orders can be delivered faster. CEO Kasper Rorsted said e-commerce will account for more than 40% of industry revenue by 2025, with online growing three times faster than offline. Adidas has already gained more than 150 million members for its online program. In addition, the company will spend one billion euros more on the brand in 2025 compared to 2021, including marketing and sponsorship, while launching sporty-inspired lifestyle products alongside its existing performance and originals fashion categories. Like competitors Puma and Nike, Adidas will put a stronger focus on the women's market and announced a partnership with Peloton (Nasdaq: PTON), which has seen a surge in subscribers to its on-demand exercise programs on exercise bikes during the pandemic. By 2025, nine out of ten products are expected to become more sustainable by using more recycled and biodegradable materials, with the Stan Smith tennis shoe leading the way with a version of a mushroom-based leather substitute due later in 2021. Rorsted said that over 70% of consumers say sustainability is an important consideration when making a purchase. With Greater China being the company's fastest growing market, Adidas will now manage this region separately from the rest of Asia. Net profit from continuing operations is expected to rise to 1.25 to 1.45 billion euros in 2021, after 429 million euros in 2020, but still below the 1.9 billion euros in 2019. Adidas expects to burden operating income of roughly € 250 million in costs to turn the ailing Reebok brand into a stand-alone business as it prepares to sell or spin off the business, with a third of that in 2022 but none in 2023.