Adidas announced plans to spend up to 1.5 billion Euros over 3 years buying back its own stock. The company will take on debt (it has no net debt) and continue to pay a dividend. Dealbook quotes the company's CFO as saying:
"We believe that our shares are currently significantly undervalued and this provides an excellent opportunity to optimize the company’s cost of capital, deploy cash and create further value for our shareholders"
At the current share price, the company could buy up to 10% of its own shares over 3 years. Bloomberg also has an article on the buyback and it focuses more on the possibility of activist investors targeting the company. The article speculates activists would want the company to replace its CEO and spin-off Reebok and TaylorMade.
Adidas is very cheap compared to its two best known - and expensive - peers: Nike (NKE) and UnderArmour (UA).
Adidas is valued more in line with the company with which it shares a founding family: Puma.
When looking at the history of those 4 companies and their cultures - it is difficult to argue that Adidas is truly comparable to either Nike or Under Armour.
Regardless, Adidas is cheap given the level of stock prices generally and the multiples at which athletic apparel companies normally trade.