German sporting brand Adidas has issued a profit and turnover alert for this year, as negative market tendencies and a strong euro worry the famous three-striped brand.
Weaker currencies, Russian move and weak golfing market
The Russian, Japanese, Brazilian, Argentinian, Australian and Turkish currencies have lost worth compared to the euro, states Adidas. That should have a ‘high-single-digit percentage’ negative effect on third quarter results.
Another reason for the lower goals is distribution having moved to a new warehouse near Moscow, limiting third quarter distribution temporarily. This in turn means that the financials goals for Russia and the former Soviet states can no longer be achieved, a problem that will be remedied by the start of the fourth quarter.
The weak golf sportswear market and Adidas’ specific golfing brand Taylormade’s focus on preserving a “healthy level of stock” mean that this section of the market had lower turnover and profits.
Lowered turnover and net profit expectations
Adidas has now lowered its profit expectations from between 890 and 920 million euro to a number between 820 and 850 million euro. Excluding exchange rate effects, Adidas expects a low-single-digit turnover increase, whereas it previously had expectations to possibly reach a ‘mid-single-digit’ increase.
Particularly the third quarter results will turn out to be negative, while Adidas expects a healthy fourth quarter recovery. It will announced its results for the first nine months of 2013 on 7 November.