Europe Markets: Adidas tumbles in Europe as supply chain woes and a tough China market hit results
Adidas shares tumbled in Europe on Wednesday after the German sportswear maker cut guidance over a familiar struggle in many sectors — supply-chain worries — in addition to a difficult market in China.
A top decliner, Adidas
fell 5% after saying it now expects full-year top and bottom lines to be at the lower end of guidance. The sportswear maker reported a 600 million euros ($696 million) hit to quarterly revenue due to a challenging China market, COVID-related lockdowns across Asia and supply-chain disruptions.
Management had guided for those woes in August. Shares have underperformed Nike
and the global sporting goods sector, year to date, but “are unlikely to recover near-term, we think, until current supply chain and Covid-related disruption diminish.,” Citi analyst Thomas Chauvet told clients in a note.
Still, he said these are “temporary factors” and unlikely to compromise the company’s ambitious “Own the Game” 2025 growth targets introduced in March, and Chauvet is sticking to a buy rating.
Shares of Adidas rival Puma fell 1.7%
The Stoxx Europe 600 index
slipped 0.2% to 482.12. Of the major regional indexes, the German DAX
was flat, the French CAC 40
declined 0.3% and the U.K. FTSE 100
The softer action for stocks came as U.S. equity index futures fell ahead of October consumer price data, which is expected to show continued inflationary pressures. It comes on the heel of a surge in China producer prices to the highest level since 1996 reported on Wednesday. Consumer prices also rose in the country.
In Europe, German consumer prices rose 4.5% on the year, which were in line with the forecasts of economists polled by The Wall Street Journal.
The biggest Stoxx 600 gainer Marks & Spencer
up 15% after the U.K. retailer swung to a pretax first-half profit and lifted guidance. Just behind it was ITV
which rose 14%, The U.K. broadcaster said it expects advertising revenue to rise on the year in its crucial fourth quarter, and has struck a long-term commercial partnership deal with Virgin Media.
Another big gainer was Swedish retail chain ICA Gruppen
with those shares up AB said Wednesday it has received a takeover offer that values the company at 107.4 billion Swedish kronor ($12.5 billion).
shares rose 2.4% after the German energy company reported narrower losses in its fiscal fourth quarter on higher revenue and issued guidance for fiscal 2022. Shares of rival E.ON
rose 1% after reporting higher profit and sales in the third quarter, and backing its forecasts for the year.
The biggest Stoxx 600 faller was S4 Capital
which fell 10% after the digital advertising and marketing-services company reported in-line revenue growth as strong momentum continued in the third quarter.
posted higher profit and revenue in the fourth quarter of fiscal 2021 as it continued to benefit from high demand for semiconductors, and said it expects a strong fiscal 2022. But the German chipmaker’s shares slipped 1%.