Adidas Trims Outlook Forecast Owing to Sluggish Golf Business and Concerns Over Russia

Adidas Trims Outlook Forecast Owing to Sluggish Golf Business and Concerns Over RussiaOn Thursday the shares of sports equipment maker Adidas AG fell following the cut of its 2014 outlook and postponement of the targets of 2015.

World Cup sponsor cited the reasons of its actions as the growing risks surrounding Russia and testing times at its golf business.

Second-quarter net profit dropped from the EUR172 million that was reported last year to EUR144 million. The sales rose 2% to EUR3.47 billion, slowed down by the effects of negative currency. The operating profit remained at EUR220 million compared to EUR252 million.

The sporting goods maker trimmed its forecast for 2014's net profit from a earlier forecast of between EUR830 and EUR930 million to about EUR650 million. Adidas said the factors that pinched on its outlook forecast were the weakness of its golf division, in addition to less favourable hedging rates and discoursing sentiments growing in Russia.

The company said, "The recent trend change in the Russian rouble as well as increasing risks to consumer sentiment and consumer spending from current tensions in the region point to higher risks to the short-term profitability contribution from Russia/CIS."

The company also said that it would hold back openings of new stores in the region in the years2014 and 2015 along with increasing the number of closures of its stores.