GERMANY: Adidas cuts FY forecasts on Russia and golf issues
Adidas, the world's second-largest sportswear maker, has lowered its full-year profit expectations on distribution issues in Russia combined with a weak golf market.
The company now expects full-year net income to reach EUR820-850m (US$1.1-1.14bn), down on prior expectations of EUR890-920m. Sales on a currency-neutral basis are expected to increase by low-single digits, against earlier forecasts of a low-to-mid single digit growth.
Adidas blamed unexpected constraints at its distribution facility in Chekhov, which is impacting new product flow to stores.
And it said continued softness in the global golf market and TaylorMade-Adidas Golf's focus on maintaining healthy inventory levels, will lead to a lower sales and profit contribution from the segment than originally forecast.
"Despite the increased headwinds we are facing in the short term, we remain confident and resolute in pursuit of our Route 2015 strategic aspirations," said Adidas Group CEO Herbert Hainer.
"Based on the strong demand for our highlight concepts and innovations in our key categories, the upcoming initiatives for the FIFA World Cup 2014 and positive customer feedback to our spring/summer 2014 collections both at Adidas and Reebok, momentum will clearly return to our business in the fourth quarter and beyond."
The company has also said that Roland Auschel will join the group's board. He is currently chief sales officer, multichannel markets. He will assume responsibility for global markets at a board level.
Michael Stanier, chief sales officer, consumer direct, and Harm Ohlmeyer, chief ecommerce officer, will report into Auschel.
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