The nine months report from Adidas is out and about. The share price have steadily moved upwards and are now up at a level that makes me feel a bit uncomfortable. In the 10 months I have owned them the share price have increased by 50%. This report was well accepted and the share price increased yet again upon the publication.
For the report in full please go here and to see my previous summary please visit Adidas report Q2 2014 and to find out more regarding Adidas then please go to analysis of Adidas 2015.
Their key figures summary I consider good enough for being the only thing I show and it can be seen below. Despite their tough environment in Russia they have been pushing sales very nicely and the revenue is up by 16% for the running nine months and it is worth to mention here that last year we had the world championship in football which means that they had increased sales before as well as after the championship.
Their margin is flat and it does not show here but their margin for the USA was more than 10% lower. Nike is very strong in the USA and they did not report it but I think they had almost no margin at all in the golf segments and USA is there a large market which then brought down the overall margin.
If we look at the earnings then they are up by around 15% and we currently have an EPS of 3.55 € which means that the dividend payment of 1.5 € from last year can hopefully remain as it is. They have had a share buyback program running in 2014 until June 2015 and I hope that they will stop this nonsense now that the P/E is up around 30 for the running twelve months. I can, kind of, accept that a retail company such as Adidas buy back share when they are down at a P/E below 20 but they are no longer there and then it is burning money for the purpose of increasing the wealth of the managers to push that any further. There is a time to do share buybacks and there is a time to stop doing so and we are well past the stopping period.
Conclusion: Adidas have had a really good quarter with more or less increased everything. They are actively working with new technology and I must say that I love that about them. I am however getting scared about the share price increase that we have lately been seeing. I will remain a shareholder for now but I am the time to push the sell button is getting closer and closer for each passing day.
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