adidas lowers financial forecast after disappointing Q2 results

adidas has revised its full year financial forecast after half-year sales were hit by what the brand described as a “lacklustre trading environment in Europe and the unfavourable development of several currencies versus the euro”.

Q2 net income grew four per cent to 172 million euros, while revenues fell four per cent to 3.38 billion euros.

As a result, 2013 sales are expected to grow at a low to mid single digit rate, instead of the forecasted mid single digit rate.

Revenues in Western Europe fell 11 per cent, mainly due, adidas says, to high prior year comparisons related to the sell-in of event related products for Euro 2012 and London 2012, as well as the ongoing macro economic challenges in the region.

Elsewhere, group sales in North America were down two per cent because of sales declines at TaylorMade-adidas Golf and up six per cent in Greater China.

Sales in Latin America were also up 21 per cent.

On a brand basis, Reebok returned to growth, with Q2 revenues increasing 11 per cent.

“While currency headwinds have added additional significant speed bumps to our path in 2013, from a strategic and operational perspective we are absolutely on track,” Herbert Hainer, adidas Group CEO, says.

“Our powerful product engine, clear market share win in key categories and the emerging markets and the excitement building ahead of the 2014 FIFA World Cup are all fuelling improved market sentiment.”

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