Adidas Stock Drops 18% as World Cup Marketing Costs Squeeze Profit
On Thursday, Adidas announced unprecedented net sales of €6.7 billion for the second quarter, reflecting a 14% rise in currency-neutral terms. Nevertheless, the operating profit increased by just 5% to €574 million, disappointing analysts. Marketing expenses linked to the FIFA World Cup surged by €212 million compared to the previous year, impacting profit margins. Following this news, shares dropped by 18%. These results underscore the significant financial burden of sports sponsorships, despite rising revenues. Additionally, Adidas revealed that Harm Ohlmeyer will take over as CFO starting August 1.
Key facts
- Record second-quarter net sales of €6.7 billion
- 14% increase in currency-neutral terms
- Operating profit rose 5% to €574 million
- €212 million more spent on World Cup marketing than last year
- Stock fell 18% after the announcement
- New CFO Harm Ohlmeyer appointed effective August 1
Entities
Institutions
- Adidas
- FIFA
Sources
- Quartz —