Thursday, July 31 08:36:18
German sportswear company Adidas said it would scale back plans to expand in Russia and overhaul its golf business, as problems in both areas forced it to cut its outlook for 2014 and say targets it had set for 2015 were no longer achievable.
Its shares fell 10 percent in early trade to their lowest since November 2012.
Adidas, which is due to report full results next Thursday, said second-quarter sales rose 2 percent to 3.47 billion euros, while attributable net income was 144 million.
It said it now expected a mid-to-high single-digit sales increase for 2014, before currency effects, down from a previous target for a high single-digit rise. It also forecast net income of around 650 million euros, versus between 830 and 930 million.
The world's second-biggest sportswear firm, which has been losing ground to rival Nike, said it would no longer be able to meet targets it set for 2015 and would give further details on Aug. 7.
Adidas cut its expectations for its TaylorMade golf business which it said was suffering from poor retail sentiment and slow sales of old stock.
It said it would take more steps to cut inventory in the second half and launch a restructuring programme to align costs with lower expectations for the golf industry, which has been losing popularity in its top market, the United States.
Adidas, which runs more than 1,000 stores in Russia and made more than 1 billion euros of sales there in 2013, also said it was cutting investment in the country due to a fall in the Russian rouble since the Ukraine crisis. (Reuters)
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