Adidas warning sends chill through industry
A BLEAK warning from Adidas sent a chill through the sportswear industry.
The German firm was the latest to warn over profits following Nike, Puma and JD Sports who all said shoppers are less willing to splash out on expensive footwear.
The update sent Adidas down 2.1pc in Frankfurt while JD Sports fell 1.8pc, or 2.1p, to 114.95p in London. Adidas said shares fell 5pc to £17bn in 2023.
And it warned of further pain from selling its remaining stock of Yeezy sneakers after an ill-fated partnership with Kanye West came to an end.
As a result, it expects to report profits of £427m in 2024, well below the £1.1bn that the market had pencilled in.
Chief executive Bjorn Gulden said: ‘ We do of course know that our financial performance is not good. But we are on the way to making Adidas a good company again.’
Russ Mould, investment director at AJ Bell, said: ‘Some of Adidas’ problems are of its own making. Its association with Kanye West has backfired. Celebrity endorsements are all well and good but going too deep is fraught with risk, given anybody you partner with is human and therefore inherently unpredictable.’
Other retailers came under pressure following broker downgrades. Next fell 2pc, or 166p, to 8302p, Dr Martens was down 4.3pc, or 3.85p, to 85.25p and Pets at Home sank 6pc, or 16.8p, to 263.4p.
On the wider market, the FTSE 100 dipped by 0.1pc, or 8.41 points, to 7622.16, while the FTSE 250 was down 1.2pc, or 226.79 points, to 19,131.16.
The City welcomed the first public float of the year. Microsalt, a producer of low-sodium salt, listed its shares at 43p.
That valued the business at £18.5m. The stock rose 17.4pc, or 7.5p, to 50.5p.
A major vote of confidence from analysts sent shares in Marshalls rising. Investment bank Berenberg upgraded its rating on the landscaping group, saying that despite the ‘pretty torrid time’ it has had recently, there remains reasons to be optimistic.
This includes the appointment of chief executive Matt Pullen at the start of this year. Shares gained 4.1pc, or 11.4p, to 292p.
North Sea producer Serica Energy is looking for a new chief executive as its boss Mitch Flegg plans to bring his six-year tenure to an end, less than three months after Serica’s finance boss Andy Bell told the board he wants to step down. Shares fell 2.7pc, or 5.6p, to 206p.
Rightmove has bought Home Views, a company that helps prospective residents make more informed decisions about where to live by posting reviews of property developments, for £8m.
Rightmove’s shares rose 1.4pc, or 7.8p, to 568p.
Private equity firm 3i – down 5.2pc, or 128p, to 2351p – said that Action, the Dutch discount retailer and most successful company in its portfolio, enjoyed bumper annual sales.
But it added that some of its other investments were hit by tough economic conditions.
Mining giant Glencore maintained its production forecasts for this year despite a slump in output in 2023.
That lifted shares 1.3pc, or 5.65p, to 426.1p.
And a strong performance during 2023 has helped the British insurer Phoenix meet its growth target for 2025 – two years ahead of schedule.
However, shares dipped 0.7pc, or 3.4p, to 502p.
Telecoms firm Airtel Africa said it wants to launch an £80m share buyback from March after shoring up its finances. The stock fell 1.3pc, or 1.4p, to 110.8p.