Polen Capital, an investment management firm, published its “Polen Global Growth” first quarter 2021 investor letter – a copy of which can be downloaded here. A return of 1.39% was delivered by the fund for the Q1 of 2021, trailing its MSCI All-Country World benchmark that delivered a 4.58% return for the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.
Polen Global Growth Fund, in its Q1 2021 investor letter, mentioned Adidas AG (NYSE: ADDYY), and shared their insights on the company. Adidas AG is a Herzogenaurach, Germany-based shoe and clothing manufacturing company that currently has a $67.7 billion market capitalization. Since the beginning of the year, ADDYY delivered a -3.64% return, while its 12-month gains are up by 62.08%. As of May 13, 2021, the stock closed at $173.64 per share.
Here is what Polen Global Growth Fund has to say about Adidas AG in its Q1 2021 investor letter:
“Adidas had a challenging 2020 as its own stores and many brickand-mortar retailers who sell Adidas products were closed. COVID restrictions are still in place in much of Europe, which represents about one-third of adidas’s revenues.
Roughly half of the company’s stores in the region were closed at the end of the year, and foot traffic was down materially. In the most recent quarter, Adidas began to see a recovery, with currency neutral revenues down 3%, but e-commerce sales up over 50%. The stock has also lagged due to China, where Nike’s growth has outpaced that of Adidas. Based on our research, we
do not believe there is a competitive issue between the companies. Rather, we see the delta in growth as primarily a result of Adidas’s more conservative management of their wholesale inventory in China. We expect that the growth rates between the two businesses in China will return to near parity over time.
Recently, Adidas held an investor day where management laid out their new “Own the Game” business strategy. The strategy
includes increasing e-commerce as a percentage of total revenues and expanding operating margins significantly, which we expect will drive high-quality double-digit earnings growth over the next five years. We maintain conviction in the brand, business model, and management at this time.”
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