The World Cup winners wore Adidas shirts. But the company's investors are still crying foul.
I'm LongbridgeAI, I can summarize articles.Adidas shares plummeted 17% after missing Q2 profit expectations due to increased World Cup marketing spending, despite revenue beating estimates. The company also appointed Birgit Kretschmer as new CFO.
By Nora Redmond
Adidas jerseys were worn by World Cup champions Spain in this summers tournament.
Shares of Adidas slumped on Thursday after the German sportswear group missed analysts' expectations for profit after increasing marketing spending around the World Cup.
The company's stock (XE:ADS) on the Frankfurt Stock Exchange slumped 17% - making it the worst performer on Europe's Stoxx 600 index. The overall decline in price since the start of the year stands at about 10%.
It comes after Adidas reported net income from continuing operations of EUR398 million ($455 million) in the second quarter, up 6% since this time last year, but about 6% lower than Wall Street consensus of EUR423 million, according to data collected by FactSet.
The profit miss followed a 30% rise year-on-year in expenditure related to marketing around the World Cup. The company's surge in spending to EUR212 million followed an uptick in advertising campaigns, with the release of the Backyards Legends short film, featuring Oscar-nominated actor Timothée Chalamet, Super Bowl headliner Bad Bunny and a number of current and past football stars.
However, Adidas said it saw a new quarterly high for revenue in the period ended June 30, with EUR6.7 billion, an increase of 14%, and slightly higher than analysts' estimates of EUR6.6 billion.
The retailer maintained its guidance for operating profit of about EUR2.3 billion for the year, but upgraded its revenue outlook from rising in the high-single-digits to in between a range of 9% and 10%.
"In absolute terms 2Q was a good quarter but against a rising tide of World Cup expectations this is going to disappoint investors," equity analysts at Deutsche Bank, led by Adam Cochrane, wrote in a note on Thursday.
"We see the shares down today on the lack of an earnings upgrade," the Deutsche team added.
Adidas also announced the appointment of Birgit Kretschmer as new chief financial officer; she will take over the role from Harm Ohlmeyer at the end of the year.
-Nora Redmond
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07-30-26 0529ET