Adidas assured recovery after slow growth in the last quarter
Adidas is a German company that specializes in sportswear. Currently, the supply of the Adidas’ products is not able to fulfill the demand. Authorities of Adidas have stated, shortage of Adidas products will be taken care of by the end of this year. Growth of revenue from the European market was flat and recovered from 3% fall in the 1st quarter. The company had lesser than anticipated sales as well as profits in the second quarter. Chief executive of Adidas has reported that the company may get hampered due to US Chian trade war. Also, the US recently declared China, a currency manipulator. In addition to that, Trump had warned about imposing 10% tariff on Chinese goods.
Adidas’ Share price fell by about 1.6% lately. The share had rallied hoping that Adidas might elevate its position. Germany rival Puma had increased their expected sale and profits for the quarter. Analysts from Credit Suisse wrote, regarding concerning brand momentum as the valuation gap of Adidas and other rivals. Sales of Adidas in the second quarter were US$ 6.18 billion a little lesser than what analysts had predicted. After the world cup, Adidas has observed a sharp dip in sales of soccer products. Kasper Rorsted said that Adidas has enhanced its production capacity and kick-started the logistics by air as well. Also, logistics issues had nothing to do with US-China trade war.
Adidas focused on enhancing sales of their sports gear and reduced dependability on the originals fashion line. Also, the company had new shoe launches such as pulseboost running shoes which helped in the recovery. On its 70th anniversary, athletes and celebrities are invited to boost the brand image. In the last few years, Adidas has reduced the market share of Nike in the US market. To increase the use of its products, the company is joining hands with well-known personalities in the US. Nike has reverted to this by increasing their spendings on marketing. Also, sales from the Reebok brand of Adidas has grown up by 3% due to well-liked and accepted retro styles.