A position was initiated in Adidas (XTER:ADS, Financial), the world’s second-largest company in the growing sporting goods industry, with leading market share in Europe and the number two position in the U.S. and China. The company is experiencing strong, renewed brand momentum, especially in highly profitable China. We believe Adidas is approaching an inflection point in momentum as supply constraints fade and product tailwinds build. We expect the e-commerce channel to drive structurally higher profitability and accelerating market share gains. Margins should continue to benefit from centralization of the business model, cost and process rationalization, and technology systems upgrades.
From Spiros Segalas (Trades, Portfolio)' Harbor Capital Appreciation Fund third-quarter 2019 commentary.
