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Cost hits take bounce out of Adidas shares

Thursday, November 03, 2016 - 01:32

Adidas is to take one-off costs to restructure the Reebok brand and invest in its future growth as it reports sales momentum slowed slightly in the third quarter. David Pollard reports.

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Speed takes guts, as the ad says, but it also takes stamina. The tiniest sign of it waning has knocked Adidas shares badly. Sales growth hit forecasts - but didn't beat them. And it's taking a hit for its Reebok brand. (SOUNDBITE) (English) CMC MARKETS ANALYST, JASPER LAWLER, SAYING: "This was a bit of a surprise, the fact that they're putting some costs aside for this restructuring. And so the reaction from investors has been a negative one." Shares marked down seven percent down - as traders dealt with a new idea. That for the first time in a long time, Adidas would break a trend of outstripping forecasts. A habit that's pumped its shares up by two-thirds - in a year that's seen it grab market share from its rival: Nike. (SOUNDBITE) (English) CMC MARKETS ANALYST, JASPER LAWLER, SAYING: "That share price performance alone gives you an idea as to how much ground Adidas has made over Nike. And similarly when you look at other competitors in the area - Under Armour for example made similar headway against Nike. It's losing some of its market share." 30 million euros will be put into the Reebok restructuring - an unspecified amount into future growth. (SOUNDBITE) (English) CMC MARKETS ANALYST, JASPER LAWLER, SAYING: "Reebok doesn't really have that momentum that Adidas's core brand has at the moment. It doesn't have the Kanye West type effect at the moment, so if they can put a bit more effort into it, that's just another front on which they can hit Nike." New Adidas boss Kasper Rorsted took over last month. For some the share hit just profit-taking ... For others a sign the markets expect nothing very short of miracles.

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Cost hits take bounce out of Adidas shares

Thursday, November 03, 2016 - 01:32