Herzogenaurach – Following today’s Executive Board meeting, Management is updating its full year expectations to account for recent negative market developments. Firstly, the further weakening of several currencies versus the euro throughout August and September such as the Russian rouble, Japanese yen, Brazilian real, Argentine peso, Turkish lira and Australian dollar have intensified the negative currency translation headwinds already highlighted by Management during the course of the year. This is estimated to lead to a high-single-digit percentage point negative translation impact in the third quarter. Secondly, an unexpected short-term distribution constraint as a result of the transition to the adidas Group’s new distribution facility in Chekhov, close to Moscow, is impacting the quantity of new product flow to stores. While the problem is expected to be resolved at the beginning of the fourth quarter, this, together with the weakness of the Russian rouble, means that the Group’s 2013 goals for Russia/CIS are no longer attainable. Finally, the continued softness in the global golf market and TaylorMade-adidas Golf’s focus on maintaining healthy inventory levels in the marketplace will lead to a lower sales and profit contribution from the segment than originally forecasted.
Taking all of these issues into account, Management now expects a low-single-digit currency-neutral sales increase (previously: low- to mid-single digit increase) for the full year, an operating margin of around 8.5% (previously: approaching 9.0%) and net income attributable to shareholders to increase at a mid-single-digit rate to a level of € 820 million to € 850 million (previously: € 890 million to € 920 million). In terms of phasing, a significant portion of the negative impact will be in the third quarter, with Management continuing to expect a strong rebound in sales and profitability growth in the fourth quarter. adidas Group nine months financial results will be released on November 7, 2013.