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"Costs" For Who? Adidas Drops Most Ever After Slashing Guidance: Blames Russia

Tyler Durden's picture




 

It would appear "Russia" is the new "weather" when it comes to missed earnings expectations. As Bloomberg reports, Adidas shares fell by a record after the world’s second-largest sporting-goods maker slashed its full-year profit forecast, bursting euphoria around the German company less than a month after its national team’s victory in the World Cup. The reason, aside from golf, "turmoil in Russia," which just happens to be its most profitable region. But Jack Lew promised that there would be no impact?

 

 

As Bloomberg reports,

Adidas said profit this year will miss its forecast by at least 180 million euros ($241 million). The shoemaker and apparel maker scrapped a long-standing growth target for next year, citing a slump in demand for golf supplies in North America combined with turmoil in Russia. The shares tumbled as much as 16 percent in Frankfurt trading, the biggest intraday drop since the company’s 1995 initial public offering.

 

“You could argue they’ve been a victim of their own success,” said John Guy, an analyst at Berenberg Bank in London who recommends buying the shares. “Russia is one of their most profitable regions,” and now a dispute with Ukraine and economic sanctions against Russia are weighing on the outlook.

 

...

 

Net income this year will be about 650 million euros, Herzogenaurach, Germany-based Adidas said in a statement, down from the earnings of 830 million euros to 930 million euros the company had previously anticipated.

 

...

 

Adidas said it plans to close stores and delay openings in Russia, a market where 2013 sales exceeded 1 billion euros. Adidas had previously planned to end this year with more than 100 net new stores, spokeswoman Katja Schreiber said.

 

The company had named Russia and the former Soviet countries one of its three “attack markets,” which were supposed to contribute about half of the company’s sales growth.

*  *  *
Who could have seen this coming in what Putin called the 'interconnected world'? It would seem the Europeans will soon be asking Washington to stop with the "costs"...

 

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Thu, 07/31/2014 - 09:25 | 5026865 LawsofPhysics
LawsofPhysics's picture

What?  Did the Russians stop buying sneakers?  WTF?

Thu, 07/31/2014 - 09:26 | 5026873 wallstreetapost...
wallstreetaposteriori's picture

the shares fell by 10 points and its the largest drop ever.... talk about price stability.  The stock would be a buck if it was listed in the US

Thu, 07/31/2014 - 09:47 | 5026955 pods
pods's picture

MY aaaaDEdas.

-Run DMC

Thu, 07/31/2014 - 10:11 | 5027023 CheapBastard
CheapBastard's picture

>> Did the Russians stop buying sneakers? <<

 

They figured out they can buy them factory direct from china for $5 a pair with an extra pair of laces tossed in.

 

Thu, 07/31/2014 - 10:19 | 5027060 krispkritter
krispkritter's picture

Putin on the risk.

Thu, 07/31/2014 - 10:56 | 5027239 Manthong
Manthong's picture

"Putin on the risk"  good one.. :-D

 

and.. “victim of their own success”

Yeah like all of us thanks to the enlightened leadership of the greedy and arrogant bastards in .gov.

Thu, 07/31/2014 - 11:10 | 5027315 Steaming_Wookie_Doo
Steaming_Wookie_Doo's picture

I absolutely hate the concept of a "victim of their own success". What does that actually mean? They got their stats way up and then failed to sustain it, or at least identify some one-time surge. Couching this like success is a bad thing--seriously? You either lied or had dereliction of duty. But looking at their chart since the start of the year, there's nothing there that says "buy". 

Thu, 07/31/2014 - 11:11 | 5027323 BigJim
BigJim's picture

I suspect the newly homeless people all over the world are discovering they can get by without their canary Kobi's

http://www.ealuxe.com/most-expensive-basketball-shoes-world/5/

Thu, 07/31/2014 - 11:06 | 5027297 Steaming_Wookie_Doo
Steaming_Wookie_Doo's picture

You can't possibly blame a "Russian situation" for these numbers. They would not only have completely stopped buying (and from 6 mos ago as the supply chain timeline runs) but also likely set fire to stores and declared a full "sneaker jihad". 

Let's face it, the estimates numbers were really bad, nobody even tried to correct earlier. This is nothing more than incompetence at the exec level. Rather surprising for the Germans, who are famously accurate.

Thu, 07/31/2014 - 11:12 | 5027326 PT
PT's picture

Did the Russians stop buying sneakers?  Winter is coming.  They're gonna need ugg boots soon, not sneakers!

See!  You can still blame winter!

Thu, 07/31/2014 - 09:43 | 5026928 ThisIsBob
ThisIsBob's picture

I don't understand it either - nobody said they couldn't send their stuff to Russia. What "turmoil" in Russia? 

Thu, 07/31/2014 - 09:58 | 5026985 tempo
tempo's picture

mcd,pep and many other US companies will be shut out of China and Russia, replaced with national companies after stealing all trade secrets.

Thu, 07/31/2014 - 11:34 | 5027442 Canadian Dirtlump
Canadian Dirtlump's picture

So is this an implosion based on forward guidance based on potential sanctions boomerganing and or world war 3? Funny zh is making light of the potential of this geo political conflict which could literally go nuclear, all for a broke country, while they played up the ISIS thing like it was the end of civilization.

 

HYUCK HYUCK.

Thu, 07/31/2014 - 11:40 | 5027477 Larry Dallas
Larry Dallas's picture

Pretty sure you won't hear about many people not having the discretionary income to play golf in their earnings report.

 

Thu, 07/31/2014 - 09:27 | 5026877 Wahooo
Wahooo's picture

Jack Lew promised there would be no adverse impact - to israel likely.

Thu, 07/31/2014 - 09:27 | 5026878 NoDebt
NoDebt's picture

"It would seem the Europeans will soon be asking Washington to stop with the "costs"..."

Look, if you want to keep getting led around by the nose, go ahead and keep working with DC.  But one thing I can assure you is that the "costs" of doing so will NOT decrease.

Thu, 07/31/2014 - 09:27 | 5026879 Sudden Debt
Sudden Debt's picture

I didn't do my homework because Putin... russia... and America who is sticking it's nose in a ass that it doesn't belong to....

Thu, 07/31/2014 - 09:29 | 5026880 AssFire
AssFire's picture

Russians reject the Nike marketing. Go Russia!, just do it.

Thu, 07/31/2014 - 09:29 | 5026884 kowalli
kowalli's picture

Europe will dig more and more...and when they will think they at bottom someone will knock from below

Thu, 07/31/2014 - 09:32 | 5026885 Spungo
Spungo's picture

Haha. That's like KFC cutting guidance and blaming it on black people. For those who don't know, there's a stereotype that Russians always wear track pants.

 

https://answers.yahoo.com/question/index?qid=20100824135211AACDLXf

Thu, 07/31/2014 - 11:25 | 5027393 Colonel Klink
Colonel Klink's picture

Don't they?  Wow, I learned something new today.  I thought they all stumbled around all day drunk on vodka too.

Thu, 07/31/2014 - 18:05 | 5029679 Kevin Brown
Kevin Brown's picture

Adidas is massively popular in Russia and Ukraine. Have you seen how many sportswear shops there are? A hell of a lot.

The market in Ukraine and Russia for Adidas is enormous.

Thu, 07/31/2014 - 09:31 | 5026894 yogibear
yogibear's picture

Putin is a tactician vs Obama, a community organizer.

Guess who's going to win in the long term?
Barry is out-classed.

Thu, 07/31/2014 - 09:43 | 5026939 Bingo Hammer
Bingo Hammer's picture

Putin practices the art of Judo (http://en.wikipedia.org/wiki/Judo) and is therefore a Judoka...

While Obama puts little white balls into little black holes 

Thu, 07/31/2014 - 10:00 | 5026994 BlindMonkey
BlindMonkey's picture

Barry is a sock puppet.  Think of him like Bert from Sesame St.  but with less personality.  I make my fair share of cracks on the sock puppet but I know he isn't in charge.  TOTUS (deep state if you will) is in charge. I have never liked the checkers vs chess analogy.  While it is true when talking about Barry, it is not when talking about TOTUS.   It is smart but terribly overconfident.  They have to defend the petrodollar or they are cooked.  

Thu, 07/31/2014 - 09:34 | 5026899 Super Hans
Super Hans's picture

It's not a stereotype.

Thu, 07/31/2014 - 09:34 | 5026900 pacdm
pacdm's picture

Is this the same Adidas that just signed a sponsorship deal with Man Utd. 750 million pounds over 10 years.

 

Thu, 07/31/2014 - 10:47 | 5027199 syntaxterror
syntaxterror's picture

Everyone on earth knows the adidas brand. It's rammed down your throat just like that god-awful nike garbage.

To pay three quarters of a billion dollars to dress up some football team is an absolute laugher.

Thu, 07/31/2014 - 12:32 | 5027271 Manthong
Manthong's picture

I bought a nice comfy pair of Chinese Costco sneakers for $15.00.

They don't look half too bad either.

I can have at new pair of sneakers each year for 5 years or more for the price of a single pair of Addidas or Nikes.

Thu, 07/31/2014 - 13:01 | 5027875 angel_of_joy
angel_of_joy's picture

I guess the Russians just figured the trick too...

Thu, 07/31/2014 - 09:35 | 5026905 dobermangang
dobermangang's picture

I almost bought a 4 pack of Adidas polo shirts on Ebay for $41.00.  I got outbid at the last second.

Thu, 07/31/2014 - 09:37 | 5026916 yogibear
yogibear's picture

Europe, already declining, will be begging Putin soon after he ramps up natural gas prices and squeezes the socialist.

Barry's plan is sure backfiring. He should use his brain instead of flapping his Chicago big mouth.

Thu, 07/31/2014 - 09:41 | 5026931 LawsofPhysics
LawsofPhysics's picture

Please, Barry's plan is and has always been to destroy the western economy as it was and re-build it with a new world currency.  I'd say things are going according to plan.

Thu, 07/31/2014 - 10:20 | 5027069 ThisIsBob
ThisIsBob's picture

I would also suggest that it is part of his plan to dilute the populatrion with minorities, thereby getting some of the power out of whitey's hands.

Thu, 07/31/2014 - 13:04 | 5027889 angel_of_joy
angel_of_joy's picture

He's quite good with the destruction part. Not so sure about reconstruction though... Looks like some BRICS might have a different idea.

Thu, 07/31/2014 - 09:42 | 5026936 MollyHacker
MollyHacker's picture

Reading from Reuters ~ "Ukrainian military spokesman Andriy Lysenko said the rebels were digging in for battle near the crash site: "They have brought a large number of heavy artillery there and mined approaches to this area. This makes impossible the work of international experts trying to start work to establish the reasons behind the Boeing 777 crash."

http://mobile.reuters.com/article/idUSKBN0FZ1JF20140731?irpc=932

I think the evidence is pointing to the Ukrainion Air Force tactics of incorporating unsuspecting air carriers for the purpose of "human shields" and yet the vigilant attacks on Russia persist?

Thu, 07/31/2014 - 09:44 | 5026947 jon
jon's picture

whoa, whoa, whoa. everybody knows russians LOVE adidas. how many movies have you seen where the russian mobsters are decked out in tracksuits? all adidas. life imitates art.

this is nothing like that bullshit "weather" excuse, this is for real, and anybody could have seen that coming.

Thu, 07/31/2014 - 09:44 | 5026952 potato
potato's picture

Everything in Europe is insanely expensive. I don't see how anyone who makes less than  €200,000/yr can have quality life in a big European city comparable with about $120,000 in USA.

 

Thu, 07/31/2014 - 09:52 | 5026970 Ghordius
Ghordius's picture

we have, generally speaking, a more modest lifestyle. Spartan, compared with the American standards. but quality is not quantity, imho

we spend, for example, less time commuting or working. we eat more at home, less out or prepackaged or brought in food. our living/home space is smaller, we burn half as much oil per capita, and so on

Thu, 07/31/2014 - 10:03 | 5027006 BlindMonkey
BlindMonkey's picture

If you measure quality of life in tire smoking dually fun, you guys are just fucked.  

 

https://www.youtube.com/watch?v=Z20ge6gJcyw

Thu, 07/31/2014 - 10:11 | 5027021 Ghordius
Ghordius's picture

LOL. "All pedal on POSi pull out .Gear Shifting Burnout 10,000lbs truck ,Ford F-450 6.4 King Boosted Burnout TheTrain®™ H&S Tuner on 300HD TUNE Rolling Coal"

absolutely. try that in most of Europe and you risk getting lynched, fined, tarred and feathered

which is strange if you think that we have also roads (in Germany only, though) where there is no freaking speed limit whatsoever

my personal record was 325 Km/h (and I still shudder when I think about that night)

Thu, 07/31/2014 - 13:05 | 5027901 angel_of_joy
angel_of_joy's picture

Congratulations ! That's usually a speed where pretty much everything takes off...

Thu, 07/31/2014 - 13:09 | 5027916 angel_of_joy
angel_of_joy's picture

That's a good (and lasting) sign of redneck retardation, right there.

Thu, 07/31/2014 - 10:05 | 5026981 williambanzai7
williambanzai7's picture

You should try it. Small is beautiful.

We Americans are collectively brainwashed into believing happiness is tied to a McMansion full of plastic made in China iShit, gigantic refrigerators full of frozen processed Monsanto Solent Green and shitty big cars financed with debt.

Once you free yourself from that consumerist walled garden, there is no turning back.

This is not to say the rest of the fiat world is enlightened; practically speaking, they just don't have the space for it.

Thu, 07/31/2014 - 11:22 | 5027377 Steaming_Wookie_Doo
Steaming_Wookie_Doo's picture

Amen William. Back in post-war America, the avg home size was about 1200 sq ft. This comfortably fits a family of 4. Now I hear co-workers complaining that a 2500 sq ft house for *2* people is not enough! And the cars...I see folks perpertually spending $400-600/mo on payments, 'cos of course ya gotta get a new car every 3-5 yrs. No need to put that money into retirement savings or paying down your mortgage. Hmm, wonder why their 70s and beyond might look kinda grim.

Yeah, really look at your purchases and the philosphy behind them. 

Thu, 07/31/2014 - 11:07 | 5027072 fervent in spirit
fervent in spirit's picture

.

Thu, 07/31/2014 - 10:23 | 5027086 fervent in spirit
fervent in spirit's picture

Potato, they can always move out of the expensive places, live in a more modest home, drive a less expensive car, and generally quit feeding the debt monster.

Thu, 07/31/2014 - 10:59 | 5027244 yellowsub
yellowsub's picture

I remembered eating breakfast in Barcelona 3 years ago, I don't see how they can afford like $6-8 Euro meal consisting of small fried 2 eggs and ham and how these places can stay in business.

Not sure if Bourdain being here on a show jacked up the prices...but overall, it wasn't cheap to eat even comparing to NYC.

Thu, 07/31/2014 - 09:51 | 5026966 Duffy
Duffy's picture

A bit o/t, but maybe there are some green shoots: 

Former US Intel Officers Warn President Obama on US Actions Against Russia

Thu, 07/31/2014 - 09:58 | 5026988 sessinpo
sessinpo's picture

Duffy    A bit o/t, but maybe there are some green shoots: 

Former US Intel Officers Warn President Obama on US Actions Against Russia

----

News flash to those un intelligent officers. Obummer doesn't give a F ck.

Thu, 07/31/2014 - 09:51 | 5026967 gcjohns1971
gcjohns1971's picture

But,

I thought Germany and Russia were new best-buds?

Joining forces?

De-Merkel'ed and Putinized?

Because cult of personality was a good thing?

Thu, 07/31/2014 - 13:13 | 5027935 angel_of_joy
angel_of_joy's picture

Give it a bit of time. Last time I checked, Merkel had a minority government... Coolness (as in weather AND economy related) can do wonders to the most stuborn minds...

Thu, 07/31/2014 - 09:52 | 5026971 Seasmoke
Seasmoke's picture

I love the Adidas Rev30 NBA Jerseys. 

Thu, 07/31/2014 - 10:15 | 5027044 johny2
johny2's picture

divide and rule. working as good as 2000 years ago. the trickster who is behind it is out of the news

Thu, 07/31/2014 - 10:16 | 5027047 The Most Intere...
The Most Interesting Frog in the World's picture

MSFT gonna beng swirling in the toilet bowl we call a stock market soon as well.  Mother Russia does not want puny Amerikan software!

Thu, 07/31/2014 - 10:44 | 5027183 Quinvarius
Quinvarius's picture

China is not happy with MSFT either.  MSFT needs government and corporate contracts.

Thu, 07/31/2014 - 10:27 | 5027106 suteibu
suteibu's picture

I guess anything Obama touches turns to shit.  When Eisenhower played golf, it encouraged an entire generation to to learn the game.

Thu, 07/31/2014 - 11:14 | 5027331 Emergency Ward
Emergency Ward's picture

I think regular golfers pick up on the fact that Obama is a fucking hacker that doesn't repair his divots.

Thu, 07/31/2014 - 11:26 | 5027404 Colonel Klink
Colonel Klink's picture

He had Biden fix all the plugs.

Thu, 07/31/2014 - 10:45 | 5027179 Quinvarius
Quinvarius's picture

This is tangible.  And suddenly earnings matter?  Not good for this house of paint we call a stock market.

Thu, 07/31/2014 - 11:09 | 5027300 tony wilson
tony wilson's picture

what of the mighty cia saidi jewish isis brigades think those millions of kosher numeracy loving satanist actors in sneakers.

did we not see a million men in the desert in addihash white sneekers.

shirley missus the slack of putnik sales is more than made up for with the million strong isis hollywood psy army of tel aviv

Thu, 07/31/2014 - 12:53 | 5027820 SmittyinLA
SmittyinLA's picture

They were Chinese copies, Jihadi/bangers dont pay license fees 

Thu, 07/31/2014 - 11:12 | 5027327 notadouche
notadouche's picture

Russia problems had this big of an impact on earnings in such a short time?  Really.  What exactly has been impacted that would harm earnings of any company in just a couple of weeks other than say Malaysian airlines.  Now I could see them being impacted a great deal.  Anyone else claiming damage is farcical.  Now the excuses begin as to why the market will crater never mind the real reason, assuming the Fed discontinues artificial support.

People tend to forget that, while the market was seen as a boon for Clinton, by the time he left office the Nasdaq was off by more than 50%.  He got the benefit of the internet roll out and the bogus Y2K paranoia but for reasons I still can't fathom doesn't get any of the stink of the collapse and loss of all that phantom wealth and the realization that most of the jobs he got credit for "creating" were in fact as temporary as the paper wealth held by so many internet millionaires.   The list of companies that had astronomical stock prices in late 1998 that disappeared by the beginning of 2000 is truly mind boggling.  

Thu, 07/31/2014 - 11:38 | 5027467 q99x2
q99x2's picture

I've never owned an adidas.

Thu, 07/31/2014 - 12:05 | 5027609 Lendo
Lendo's picture

Russians do love those Adidas track suits..

Thu, 07/31/2014 - 12:50 | 5027801 SmittyinLA
SmittyinLA's picture

Big soccer market, Russian got those big slav feet that fit Adidas

Thu, 07/31/2014 - 13:17 | 5027955 Coletrane
Coletrane's picture

BOOM ( erang)

Thu, 07/31/2014 - 14:19 | 5028298 AbbeBrel
AbbeBrel's picture

Hey it is the new seasonal paradigm - the Russian Winter in Summer (blame it on the weather)!! Keep in mind that during the filming of Dr. Zhivago they had to paint the leaves white when they filmed the winter scene (the actors were perspiring in fur coats as they departed in their sleigh) during the Spanish summer... Anything can happen now.

http://www.outofthepastblog.com/2010/05/doctor-zhivago-1965-45th-anniver...

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