Adidas Hopes Int'l Kit Launch, World Cup Will Help Restore Sales Growth
Adidas hopes the launch of new team kits before next year’s World Cup "will restore sales growth after the German sportswear firm reported a slowdown in Europe in the last three months," according to Emma Thomasson of REUTERS. Adidas CEO Kasper Rorsted said that the company is making shirts for teams including Germany and Spain. It is "lifting marketing spending and expects a sales acceleration in the Christmas shopping season." Third-quarter sales rose 9% to €5.67B ($6.6B), missing average analyst expectations of €5.86B ($6.8B). Growth "slowed" in Europe even as the German firm "powers ahead" in China and North America. Rorsted said that the lower growth in Europe was "largely due to a general slowdown in the market," while the termination of sponsorship deals with the NBA and Premier League champion Chelsea "led to an overall decline" in basketball and football sales. Adidas shares, which are up more than a third this year, were down 2.6% to their lowest level in almost four months, "making them the second biggest decliner on Germany’s blue chip index .GDAX." Some investors predicted adidas "might lift its forecasts" for '17 after Puma last month "increased its targets for the year." But adidas, which already raised its '17 outlook in July and lifted its long-term forecast in March, confirmed it expects '17 currency-neutral sales to rise between 17% and 19% and net income to increase at between 26% and 28%. Citi analyst Dan Homan, who rates adidas shares "neutral," said, "While implied fourth-quarter growth of 20-30 percent looks challenging, profitability targets look well underpinned" (REUTERS, 11/9).