PARIS — Adidas stock slid 15.4 percent in trading Thursday after the company lowered its full-year guidance.
Shares closed at 59.41 euros, or $79.67 at current exchange.
The company said Thursday morning currency fluctuations and high marketing costs linked to the FIFA World Cup dented its second-quarter sales.
Citing factors such as tensions in Russia and Ukraine, increasing marketing costs and the poor performance of the golf segment, Adidas said it now expects a mid- to high-single-digit increase in currency-neutral sales in 2014, after earlier predicting a high-single-digit rise.
In addition, it lowered its forecast for net profits to around 650 million euros, or $887 million, from a range of 830 million euros to 930 million euros, or $1.13 billion to $1.27 billion, previously. Adidas management postponed the delivery of its so-called Route 2015 targets at a meeting of the executive board, it said.
Sales rose 2 percent in the second quarter to 3.46 billion euros, or $4.75 billion. Stripping out the effect of foreign exchange rate variations, revenues were up 10 percent. Net income attributable to shareholders totaled 144 million, or $197 million, during the period.
Herbert Hainer, chief executive officer of the Herzogenaurach, Germany-based sporting goods firm, said it plans to clean up markets, focus on growth opportunities and revise its internal organization in a bid to return to “a higher and more consistent level of earnings growth” in the mid to long term.
“Everything we announced today has one objective: to strengthen our brands, to drive consumer desire, and to set our group up for long-term success. As we gear up for our next five-year strategic plan, we will assert ourselves much more aggressively in the marketplace,” he said.
“While we have delivered notable achievements with our Route 2015 plan, we also accept that we have not executed to our high standards at all times or provided enough flexibility to react in adverse market conditions. This we now tackle head on. The strength of our winning performance at the 2014 FIFA World Cup shows exactly what we are capable of when we execute flawlessly,” Hainer added.
Adidas is scheduled to publish full financial results for the first half on Aug. 7.
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