Specialist
Former executive at Zalando SE
Agenda
- Adidas’s (ETR: ADS) growth challenges and outlook, highlighting pricing strategy and product innovation
- Inventory management, touching on overstock challenges
- Strategic challenges across retail, wholesale and e-commerce
- New management and brand equity outlook
Questions
1.
How did the sports apparel and performance market perform during the pandemic? How might the return-to-office trend and the increased requirement for office attendance impact sportswear demand?
2.
Do you think promotional levels are likely to continue increasing or stay the same for the rest of 2023?
3.
Which products or categories are likely to face shortage in supply?
4.
When you say there might be a shortage in autumn 2023, is that because companies are planning lower stock purchases, or because there will be a problem in the supply chain itself?
5.
What is your outlook for sportswear demand in the next 12-18 months?
6.
Adidas mentioned that its 2023 sales growth outlook is likely to be in single-digit decline. What are your thoughts on this? Why do you think the company’s sales are likely to decline? How is this likely to break down across its regions?
7.
How do you think Adidas’s growth is likely to vary across regions?
8.
On the topic of Adidas’s inventory levels problem, how is the company’s excess inventory split between apparel and footwear? How does it compare to splits for players such as Nike?
9.
Adidas mentioned that it’s planning to shift inventory across markets. How does that work, especially for inventories in China, and how successful do you think this strategy will be?
10.
You mentioned Adidas has a higher promotional level or is more aggressive in terms of promotion activities. Is this problem going to continue for the rest of 2023?
11.
Do you think Adidas’s product mix is perceived as less premium without the Yeezy product? Do you think the company’s brand equity has been damaged and thus it has a lower pricing power?
12.
What is your 2023 outlook for Adidas’s price increases, compared to 2022?
13.
If we look at the cost challenges, where are we now in terms of the cost inflation cycle? How is cost inflation likely to change in 2023 vs 2022?
14.
Are we likely to see customers trading down from Adidas to other cheaper brands?
15.
Are we likely to see an increase in input costs for Adidas, considering the general market?
16.
If we take into account cost, price and promotion levels, how do you see Adidas’s gross margin evolving in 2023? This declined 3% in 2022. Are we going to see a further decline this year?
17.
What are the key long-term threats to Adidas as a brand? Do you think the company is over-reliant on collaborations?
18.
How do you think Adidas’s collaboration strategy is likely to evolve in the next 2-3 years?
19.
What are your thoughts in terms of new Adidas CEO, Bjørn Gulden? How do you think he will be driving innovation and product expansion?
20.
Given the low margins and high fashion risk in the performance category, do you think it’s the right step for Adidas to focus on this category and expand it further? How will this impact margins long term?
21.
What is an optimal split between performance and lifestyle categories for a brand such as Adidas?
22.
What opportunities are available for Adidas to expand the smaller sports segment?
23.
What does Bjørn’s plan to expand Adidas’s performance category mean in terms of CAPEX? How much do you expect CAPEX to increase?
24.
What are Adidas’s key advantages and limitations compared to those of Nike and other global sporting goods brands?
25.
What are your thoughts on Adidas’s product strategy vs Nike’s, especially in relation to SKU management?
26.
It seems Adidas usually drops loads of SKUs concurrently, which has an initial impact and then fades away, while Nike has a different strategy. What does that mean? How is this likely to change for Adidas long term? What can the company do to change this?
27.
What can Adidas do to achieve a more cohesive product strategy between footwear and apparel, like Nike’s?
28.
Adidas lost market share in its lifestyle footwear due to Yeezy brand drop. Which other players do you think are filling the gap?
29.
What is your outlook for Adidas’s medium-term market share?
30.
Currently, Adidas’s wholesale segment is outperforming its D2C. What is your mid-term outlook for its channel mix?
31.
Can you elaborate on the challenges Adidas’s brands have faced when the company decided to move to D2C?
32.
How would you describe Adidas’s position and negotiation strength with wholesale partners?
33.
How do you think Adidas’s products are positioned within stores and on shelves? Is it favourable?
34.
Why do you think Adidas’s online sales are declining? Is it due to more of a shift towards stores, or a problem with the company’s online channel performance?
35.
What do you think is an optimal split across retail, wholesale and online for Adidas?
36.
Do you think Adidas’s China segment has higher online sales?
37.
What is your mid-term outlook for EBITDA margins? What do you think are the main drivers?
Gain access to Premium Content
Submit your details to access up to 5 Forum Transcripts or to request a complimentary one week trial.
The information, material and content contained in this transcript (“Content”) is for information purposes only and does not constitute advice of any type or a trade recommendation and should not form the basis of any investment decision.This transcript has been edited by Third Bridge for ease of reading. Third Bridge Group Limited and its affiliates (together “Third Bridge”) make no representation and accept no liability for the Contentor for any errors, omissions or inaccuracies in respect of it. The views of the specialist expressed in the Content are those of the specialist and they are not endorsed by, nor do they represent the opinion of, Third Bridge. Third Bridge reserves all copyright, intellectual and other property rights in the Content. Any modification, reformatting, copying, displaying, distributing, transmitting, publishing, licensing, creating derivative works from, transferring or selling any Content is strictly prohibited
