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Nike (NKE) rival Adidas (ADDYY) slipped after warning of slowing growth and supply chain issues.
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The German sportswear giant has announced that its sales would increase by 5% to 8% this year, against 8% last year. In addition, growth will represent only about half of the growth rate forecast for this year in the first six months of the year. The company is under pressure from the market leader, Nike, who has introduced a host of new products.
Adidas said it would be affected by supply chain problems in the first half of 2019, which means it could not produce as many products as it could sell. This problem alone will result in lower income growth of 1 to 2 percentage points.
"While the company is experiencing a surge in demand for mid-priced clothing, Adidas will not be able to immediately cover this demand due to the shortage of supply chains," the company said in a statement. Press. "As a result, growth should be negatively impacted, particularly in North America during the first half of the year".
Adidas Stock Tickets
Adidas shares closed down 2.8% to 116.01 today. Nike, which reports next week, rose 0.6%, Under protection (UAA) added 1.15% and Skechers (SKX) was flat. Sportswear manufacturer inspired by yoga Lululemon Athletica (LULU) plunged 0.3%.
While Adidas was disappointed with the outlook, his results were good. The company saw its operating profit climb 10.8% to 2.4 billion euros in 2018, which was in line with expectations. The adjusted business figure for currency conversion increased by 8% to 21.9 billion euros. Its operating margin was up 1.1% to 10.8% and it promised to improve to 11.3% -11.5% in 2019.
Analyst says Adidas is lagging behind Nike
Cowen chief executive John Kernan, who believes Adidas shares are outperforming, said that Nike has the best of its European rival. He added that the company needed to innovate further to conclude a discount on the evaluation at Nike.
"We believe that Eric Liedtke (Head of Adidas Global Brands) and his team are ready to step up innovation, as Prophere, Deerupt, Solar Boost, POD and Pure Boost seem promotional and less competitive compared to we, "he said.
He expects Yeezy's fashionable line, the brainchild of rapper Kanye West, to make a large-scale breakthrough in basketball this year to rival Nike and Puma.
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