Adidas shares may be in for good run – Barron’s

NEW YORK, Aug 15 (BestGrowthStock) – Athletic footwear maker Adidas
(ADSG.DE: ) could be in for a good run soon if its Reebok brand
continues to gain strength, according to an article in the Aug.
16 edition of Barron’s.

When the German sporting goods maker purchased Reebok for
about $4 billion in 2006, the newly acquired brand stumbled in
the face of stiff competition from Nike Inc (NKE.N: ) and other

Nike weathered the recession relatively well, while Adidas
struggled under heavy exposure to Russia and weakness from
Reebok, Barron’s said.

However, Reebok second-quarter 2010 sales leapt 16 percent,
boosted by a 30 percent jump in North American sales. Average
selling prices rose 20 percent in the first half of the year
following Reebok’s product line upgrade, Barron’s said.

Morgan Stanley sees Adidas’ earnings growing at an annual
compound rate of 24 percent over the next two years, versus an
expectation for Nike to grow at 13 percent, Barron’s said.

That spread and other expected improvements should earn
Adidas a price/earnings multiple of at least 15 percent,
Baron’s said.
(Reporting by Ilaina Jonas; editing by Gunna Dickson)

Adidas shares may be in for good run – Barron’s