In the third quarter, sales in Western Europe fell by just over one percent – a serious shame for a sports firm. Since the American rival Nike has recently grown in the region by six percent. The leader of the world market thus takes away the market shares of Adidas.
"We quickly responded with trends quickly," said Adidas chief Kasper Rorsted on Wednesday morning in a conference call. In addition, his company too long felt about the success of fashion retro recreationists, instead of strengthening the basic activity with sports equipment. It's now revenge: "We were not close enough to the consumer."
Due to weak business performance in Western Europe, Rorsted had to reduce its revenue forecast for the current year. So far, Dane has promised a plus of up to ten percent with a continuous exchange rate. Now he expects a maximum of nine percent.
This exchange was disappointed on Wednesday morning. With minus more than two percent, Adidas was the biggest loser in Dax in a friendly environment. Nor did it help Rorsted at the same time to design an earnings forecast.
The profit is expected to increase by 16 to 20 percent in the current year, so far the former Henkel boss has increased by 17 percent in the future. It is now expected that the operating margin will climb to 10.8 percent, and last year it announced 10.3 percent to 10.5 percent. "In addition, we are on track to reach our long-term goals by 2020," said Rorsted.
In addition to Europe, Rorsted continues to care for Reebok. The sale of the US subsidiary fell by around 5% on a currency neutral basis. In euros, the minus was more than ten percent to 436 million euros. The profit of the brand has shrunk everywhere except in the US, so it is Rorsted. The only bright spot in Reebok: Gross profit has increased greatly, but it is still far below the core brand Adidas.
In general, sales in the third quarter rose by 8% on a neutral currency basis. In euros, it increased by 3% to around 5.9 billion euros. This roughly corresponds to the expectations of analysts. Profit from further operations increased by 19 percent to EUR 656 million. The operating profit improved by 13 percent to 901 million euros.
Especially positive for Adidas: Americans stand on sneakers and three-line shirts. Sales in North America rose by approximately 16 percent on a neutral currency basis. In euros this increased by about 15 percent to almost 1.3 billion. This means that frank is more dynamic than the competitors of Nike on the world's largest sports products market. The sales of the West Coast marker in the region rose by only six percent; but at a much higher level.
The brand is also on high demand in China and other Asia. Sales in the region increased by 15 percent at constant rates. In euros, it increased by 14% to 1.9 billion.
"Adidas' high market investment is now paid off"
Something else stands out positively: the traffic in their own online stores has increased by 76 percent, so it is Rorsted. This is particularly important for Nike's second largest trailer manufacturer. This is because the Group creates the highest margins and is in direct contact with customers, so they can collect their data to form target bids.
Analysts still see Adidas as positive. Profit in the third quarter was slightly higher than expected, so Andreas Riemann from Commerzbank. The only concern is currently doing business in Western Europe. However, documents are attractively valued – and therefore worth buying.
Rorsted has already responded and used the new European boss in the summer. And maybe some cheap offers will help attract consumers. "For some products we have set too many optimistic prices," said CFO Harm Ohlmeyer. This should be changed easily.