Adidas Gets World Cup Boost Despite Nike Dominance on Field
(Bloomberg) -- Adidas AG got a boost from the World Cup even though some of the traditional powerhouses it sponsors, including its home country Germany, flamed out early in the tournament.
Teams supported by rival Nike Inc. -- including winner France and runner-up Croatia -- dominated the World Cup. But the sportswear company still sold record numbers of jerseys linked to the event. That fueled a 10 percent rise in its shares on Thursday, the biggest since March.
The company’s shirt sales topped the 8 million sold in connection with the tournament in Brazil four years ago, Chief Executive Officer Kasper Rorsted said on a call with reporters, making good on his June prediction. That’s even though Germany and Adidas-sponsored Spain and Argentina all exited early.
“Most of the jerseys are sold before and during the tournament,” Rorsted said. “Who is in the final has no commercial impact.’’
The company also withstood a shift in off-the-field fashion away from minimalist classic shoes like the Stan Smith sneaker and toward so-called “dad shoes” -- chunkier versions of designs from the 1980s and 1990s. German competitor Puma SE last month said the change hurt its sales in the first half of the year.
Rorsted spoke after the company posted second-quarter sales and profit that beat analysts’ expectations. Adidas said revenue adjusted for currency swings rose 10 percent to 5.26 billion euros ($6.1 billion). Analysts on average predicted 5.17 billion euros.
The company saw double-digit growth in North America, Asia-Pacific, Latin America and Russia, and reiterated a forecast for a 10 percent currency-adjusted sales gain this year.
Nike in June said its quarterly sales in the U.S. rose for the first time in a year and nudged up its sales forecast for the current fiscal year, sending the shares to a record. Under Armour Inc. also said its U.S. business had returned to sales growth.
Adidas said it had “exceptional growth” in soccer merchandise in Russia, which hosted the World Cup, and Latin America, while the category also grew at a double-digit pace in North America and Western Europe. Still, Rorsted cautioned that the tailwind for business in Russia will fade, as sanctions are holding back the local economy.
©2018 Bloomberg L.P.