Key facts
- Adidas shares fell over 15% after missing quarterly profit expectations.
- Revenue increased by 14% to £5.7bn.
- The company maintained its full-year operating profit target of £2bn.
- Marketing spend increased, notably for World Cup campaigns, totaling £180m.
- Birgit Kretschmer will become the new chief financial officer.
Adidas shares experienced a significant drop, falling more than 15% in early trading, after the company failed to meet second-quarter profit expectations. Despite a 14% increase in revenue to £5.7bn, the sportswear giant's performance was impacted by a substantial hike in marketing expenditure, particularly for campaigns surrounding the recent Fifa World Cup.
The company maintained its full-year operating profit target of £2bn, but the market reacted negatively to the missed quarterly earnings. The increased marketing spend, amounting to £180m over the past year, included a high-profile five-minute advert featuring celebrities such as Timothee Chalamet, Lionel Messi, Bad Bunny, Jude Bellingham, Lamine Yamal, and Trinity Rodman.
Adidas highlighted growth in the running and football sectors, noting the success of a specialized shoe used by winners of the London Marathon. The company's stock performance, now at €151.20, puts pressure on CEO Bjørn Gulden's strategy to close the gap with rival Nike. Adidas also saw success with its kits for Arsenal's Premier League winning season and has lucrative deals with major football clubs like Manchester United and Real Madrid.
In leadership changes, Birgit Kretschmer is slated to join Adidas as its new chief financial officer, succeeding Harm Ohlmeyer, who will depart at the end of his contract.