Adidas AG’s earnings forecast disappointed investors hoping for bigger profits from the German brand as it contends with higher US tariffs and unfavourable currency swings.
The sportswear company expects an operating profit of around €2.3 billion ($2.7 billion) this year, it said Wednesday, well shy of analysts’ estimates.
The shares fell as much as 7.6 percent in early trading, and are down about 42 percent in the past year.
In a bid to reassure investors, Adidas extended the contract of chief executive officer Bjorn Gulden — the architect of the company’s revamp so far — through 2030 and elevated Egyptian billionaire and Aston Villa Football Club co-owner Nassef Sawiris to supervisory board chair, replacing Thomas Rabe.
Gulden needs to show investors that Adidas is in a new era of sustainable growth after capitalising on demand for fashion-oriented retro sneaker models like the Samba and Spezial. Now in his fourth year as CEO, he is looking to empower staff in local markets with decision making and derive more earnings from performance running and football products.
Investors have been skeptical about those ambitions — along with the growth prospects for the broader sportswear industry.
Adidas also pledged to boost returns to shareholders through higher dividends and share buybacks — and proposed a 40 percent increase in the dividend to €2.80 per share for 2025. The company began a €1 billion share buyback program last month.
Sawiris, a major Adidas shareholder, has been on the board since 2016. The 65-year-old has an estimated fortune of about $9.5 billion, according to the Bloomberg Billionaires Index, and recently exited the UK after the scrapping of its non-dom system that allowed tax breaks on overseas wealth for as long as 15 years.
Adidas’s operating profit this year will likely be dented by a €400 million hit from currency moves and trade levies, Adidas forecast.
The company presented midterm targets on Wednesday calling for currency-neutral net sales to grow at a high-single-digit rate in 2027 and 2028 and operating profit to expand by a mid-teens compound annual growth rate over that period.
Gulden is looking to get a boost this spring and summer from the football World Cup in North America. Sales will probably grow at a high-single-digit rate this year at constant exchange rates amid market share gains in all regions, the company said. That’s roughly in line with analysts’ estimates.
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