Adidas sales roared ahead in the World Cup – thanks to Timothée Chalamet among others – with Q2 sales reaching a record $7.7 billion (€6.74 billion.)
Unfortunately it spent an extra $243 million bringing its total marketing bill to $1.05 billion, a 30% increase on a year earlier. End result? Its shares tumbled 19%, their biggest one-day fall, as shareholders took flight.
Full-year revenue guidance was up 9-10%, but its profit guidance remained unchanged at around $2.6 billion (€2.3 billion). Hence the shareholder dismay.
You do sometimes wonder if shareholders (and we probably means analysts) actually understand the businesses they’re analysing sometimes. It’s all very well for the likes of Nvidia or even Meta to announced they’re spending extra trillions on giant energy warehouses but for any other business to invest heavily, which is, presumably, what Adidas has done, there are ructions.
It also makes you wonder if the vast sums major sporting events are charging marketers are actually sustainable.
