Adidas and Puma shares join in sell-off as Nike sales falter

Adidas and Nike shares have risen 44% and 6% respectively this year, while Puma shares have shed 11%

Fri, 22 Dec, 2023 - 17:55

Eamon Quinn

Shares in European giants Adidas and Puma joined in a sharp sell-off for the sports clothing suppliers, and shares in retailer JD Sports also fell, after Nike in the US warned that sales were slowing.

Nike shares plunged as much as 11% in New York trade after it said it was looking for as much as $2bn (€1.8bn) in cost savings by dismissing workers and simplifying the company’s product line-up amid a weaker sales outlook in China and around the world.

Adidas and Puma ended 5% and 7% lower, respectively, in Frankfurt trade, as investors feared a similar slowdown in sales across the sector. Nike’s chief financial officer Matt Friend said its new outlook reflected “indications of more cautious consumer behaviour around the world”. He singled out Greater China and Europe, the Middle East, and Africa.

The US sportswear giant sees full-year revenue rising about 1% after declines in the current quarter and a modest increase in the subsequent one. The company said it’s also seeing lower levels of growth from online sales, which has been a bright spot in the retail industry.

Nike chief executive John Donahoe said it had 'taken a more prudent approach to our planning for the balance of the year'. Picture: Andreas Rentz/Getty

“We’ve taken a more prudent approach to our planning for the balance of the year,” chief executive John Donahoe said.

In its statement, Nike said it expects to incur restructuring charges of $400m to $450m in the current quarter, “primarily associated with employee severance costs”.

Total revenue in the quarter was $13.4bn, roughly in line with expectations. Sales in Greater China came in lower than expected.

The regional performance contrasts slightly with Nike’s rivals. Puma in October cited strong demand in Europe and a recovery in China, which offset a weaker performance in the US in the third quarter.

Adidas and Nike shares have risen 44% and 6% respectively this year, while Puma shares have shed 11%.