Adidas plays down impact of World Cup soccer on sales
Adidas expects only a limited impact from the upcoming soccer World Cup in Russia, where the economy is in the doldrums, also predicting that its sales in Western Europe will stall in the second quarter.
Shares in the German sportswear company fell after the comments, trading down 5.4 percent at 1430 GMT.
Chief Executive Kasper Rorsted made the comments on an analyst call after Adidas reported that Western Europe sales growth slowed to 5 percent in the first quarter, despite support from early sales of World Cup jerseys.
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"We are moving to a flattish revenue number for the second quarter," Rorsted said of Western Europe, adding that this year`s World Cup in Russia offered fewer financial opportunities than the last competition in Brazil in 2014.
Rorsted said the soccer competition was still very important for promoting the brand but had become less crucial for driving sales.
Adidas, which is the official sponsor of the World Cup and is providing shirts to 12 of the 32 teams, sold a record of more than 2 billion euros ($2.4 billion) of soccer gear in 2014, helped by sales of its jerseys for champions Germany.
Rorsted said sales in Russia, which tumbled 16 percent in the first quarter, could get a boost in the second quarter from the competition as Adidas opens pop-up stores, but he noted that the economy remained in trouble due to Western sanctions.
Adidas made about 10 percent of its sales in Russia in 2012 but has seen the market decline to less than 3 percent of revenue due to years of recession there, forcing the German company to close dozens of stores.
Adidas finance chief Harm Ohlmeyer added that sales in Europe would also be dented by the company no longer selling its products through French sporting goods retailer Decathlon, although it hoped it could make up for that via ecommerce.
($1 = 0.8353 euros)
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)