By Andrea Figueras
Shares in Adidas plunged after the company provided an outlook for 2024 as a whole that came below expectations.
At 0906 GMT on Thursday shares traded 8.1% lower at EUR161.86.
The German sporting-goods company anticipates sales to start flattish in 2024, but to then improve every quarter.
It is also targeting currency-neutral sales growth at a mid-single-digit rate, which appears below market expectations of 9% growth, according to company-compiled consensus.
As for operating profit, the company aims to book around EUR500 million in 2024, down from consensus estimates EUR1.29 billion.
Adidas’s outlook for 2024 seems disappointing and there is downside risk for all sales and earnings projections, Baader Helvea analyst Volker Bosse wrote in a note to clients.
Following Puma’s guidance cut last week, some of the foreign exchange pressure on gross margin was expected, Deutsche Bank analyst Adam Cochrane said in a research note. However, Adidas seems to have taken a very cautious stance overall at this stage of the year, he said.
“We believe this sets a low bar for the year that should see scope for upgrades as we have seen this past year,” Cochrane said, noting that the market might start to question another year of transition for the business.
The company also posted preliminary figures for 2023 as a whole, which came in better than the company’s guidance.
Sales on a currency-neutral basis were flat on year, while the company had previously anticipated a low-single-digit rate contraction. In reported terms, sales dropped 5% to EUR21.43 billion.
Operating profit was EUR268 million in 2023, down from EUR669 million in 2022, but ahead of the company’s targets of a EUR100 million operating loss.
Underlying operating profit came in around EUR200 million in 2023, ahead of targets of some EUR100 million.
Write to Andrea Figueras at andrea.figueras@wsj.com
