Stock News: Adidas to Buy Back Shares

Adidas (ADS.DE) is the world’s second largest manufacturer of sport apparel and equipment. It is second only to Nike (NKE: NYSE) and has burn hurt by a falloff in golf and its Reebok brand. Shares of Adidas has fallen just about 38 percent this year. The company has been under tremendous pressure to turn the business around. There was also calls for the board to remove longtime Chief Executive Officer (CEO) Herbert Hainer.

Today, they announced a shareholder return program. This is their first attempt to calm angry investors who are more than unhappy with Adidas’ profits and turnaround efforts to pick up a loss of golf sales in the United States. According to the company, the return program is worth €1.5 billion. The program will be slated to run through the end of 2017 and will be an addition to the regular dividend policy.

This program will repurchase nearly 10 percent of the company’s shares of capital (stock). This was approved by the shareholders at the May shareholder’s meeting. It will be financed via Adidas’ free cash flow.

In July Adidas cut its profit forecast for 2014 to €650 million. This is compared to the range it had originally set at €830 to 930 million. They also cut their profit expectations for next year saying it would more than most likely miss those as well.