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Adidas first half profits fall 25%

Adidas profits dropped 25% at the end of the first half of the year.

The German sportswear giant’s operating profits were €523m (£415.7m) for the period January to June 2014, down from €693m (£550.8m) at the end of the same period in 2013.

“We know driving higher levels of profitability is absolutely critical to our long-term success […] we need to be more decisive and faster in dealing with our challenges,” Adidas chief executive Herbert Hainer said.  

Adidas’ sponsorship of July’s winning World Cup team Germany was not enough to prop up sales, despite selling more than two million units of the team shirt and eight million World Cup jerseys in total.

The sports brand has revised its financial guidance for 2014 and said net income would be around €650m (£515m) rather than the €830m to €930m (£658m to £737m) originally hoped for.

The company blamed currency fluctuations and the volatile Russian market for its troubles. It said less favourable hedging rates compared to last year and the devaluation of the rouble had negatively affected revenues by around €450m (£358.4m).

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