BERLIN (Reuters) - German sportswear firm Adidas AG (DE:ADSGn), struggling to keep pace with larger U.S. rival Nike (N:NKE), said it expected sales growth to slow in 2015 as it reported third-quarter results broadly in line with forecasts.
Adidas, whose long-serving Chief Executive Herbert Hainer is under pressure after a series of profit warnings he blames on the group's exposure to Russia and the flagging golf market, confirmed its sales and profit forecasts for 2014.
Bolstered by the World Cup in Brazil, the company reiterated that it expects a mid-to-high single-digit sales increase for 2014, before currency effects, and an operating margin - operating profit as a percentage of sales - of 6.5-7.0 percent.
But it trimmed its gross margin target for this year to 48-48.5 percent, from a previous 48.5-49 percent - a range it had already cut in August - after a 1.9 percentage point fall in the third quarter to 47.4 percent, in part due to increased markdowns.
It said it expects sales to rise at a mid single-digit rate in 2015, while net income should grow at a higher rate than group sales. Adidas sales are traditionally slower in years with no major sporting events like the World Cup or Olympics.
Hainer said he had been aggressively addressing the group's key challenges - restructuring its golf business, scaling back expansion in Russia and seeking to revive momentum in the U.S. market, adding he will present a new strategic plan in March.
DZ Bank analyst Herbert Sturm said investors should take heart from progress in inventory management, with inventories up 7 percent year-on-year compared with 16 percent at the half-year as Adidas managed to clear excess stock, particularly in Russia.
"Due to the significant progress in reducing inventories in the third quarter, we would expect a positive share price reaction on this in the short term," he said.
Adidas reported third quarter operating profit fell 13 percent to 405 million euros (316.98 million pounds) on sales up 6 percent to 4.118 billion, slightly ahead of average analyst forecasts for 399 million and 4 billion, respectively.
Adidas said all regions, except North America, contributed to the sales growth in the quarter, with western Europe up 10 percent on a currency-neutral basis, and eastern Europe up 19 percent, driven by growth in Russia.
Adidas shares, down nearly 39 percent this year, jumped last month on plans to return as much as 1.5 billion euros to shareholders over the next three years, seen as an attempt to placate investors and fend off moves by activist funds.
Adidas shares have also rallied on reports that an investor group that includes Jynwel Capital and funds affiliated with the Abu Dhabi government plan a $2.2 billion bid to buy Reebok, the fitness brand Adidas acquired in 2006.
(Reporting by Emma Thomasson; Editing by Victoria Bryan)