Adidas AG trimmed back expectations for the year in the wake of stiffer currency headwinds, a “short-term distribution constraint” in Russia and softness in the golf market.
This story first appeared in the September 20, 2013 issue of WWD. Subscribe Today.
The company, which markets the Adidas, Reebok, TaylorMade and Rockport brands, said its currency-neutral sales would rise by a percentage in the low-single digits this year, versus the low- to midsingle-digit increase previously anticipated.
Adidas also cut its projected earnings range this year by 70 million euros. Annual net income is now expected to rise by midsingle digits to a range of 820 million euros to 850 million euros, or $1.1 billion to $1.14 billion at current exchange.
The Herzogenaurach, Germany-based firm said the Russian ruble, Japanese yen, Brazilian real, Argentine peso, Turkish lira and Australian dollar have all weakened versus the euro. The company’s new distribution center in Chekhov, Russia, has also had some difficulties getting new product to stores.
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And the global golf market has been slow.
“TaylorMade-Adidas Golf’s focus on maintaining healthy inventory levels in the marketplace will lead to a lower sales and profit contribution from the segment than originally forecasted,” the company said.