Adidas shares plunge after hike in World Cup marketing spend
Adidas shares sank this morning after the sportswear behemoth missed quarterly profit expectations amid a hike in World Cup marketing spend.
Shares in the German firm opened more than 15 per cent down after missing second quarter profit expectations. The dent came despite revenues rising 14 per cent to £5.7bn but the firm maintained its full-year operating profit target of £2bn.
The slump comes amid a marketing spend of £180m in the last year, spearheaded by marketing campaigns relating to the Fifa World Cup earlier this year.
Adidas’ blockbuster, five-minute advert surrounding the World Cup – which was hosted by the United States, Canada and Mexico – starred the likes of Timothee Chalamet, Lionel Messi, Bad Bunny, Jude Bellingham, Lamine Yamal and Trinity Rodman.
The sportswear brand cited markets in running and football as major growth sectors, with a special super shoe used by both the men’s and women’s winners of the London Marathon earlier this year.
Adidas shares slump
The fall in share value – by 17 per cent to €151.20 at the time of writing – dents chief executive Bjørn Gulden’s plans to narrow the gap with Nike, whose market cap is more than double that of Adidas.
Adidas enjoyed a successful season in English football, with their iconic three-stripe strips used on Arsenal’s Premier League winning season.
Their largest deals are with the likes of Manchester United and Real Madrid, however, with each kit agreement worth upwards of $100m per season.
And with United’s return to the Champions League later this year, that deal for the club co-owned by Ineos billionaire Sir Jim Ratcliffe is likely to increase.
The German brand is also a sponsor of Fifa, and the provider of the match ball used in the World Cup final.
Birgit Kretschmer is set to join the brand as its chief financial officer, replacing Harm Ohlmeyer who will leave when his contract expires at the end of the year.