Adidas Stock Slips as Veteran CEO Kasper Rorsted Considers Leaving

Updated at 10:26 a.m. EST

Adidas S.A. (ADDYY) shares fell on Monday after sportswear group and global Nike (NKE) rival, said CEO Kasper Rorsted will leave the company next year.

Rorsted, who led the group since 2016, will remain CEO until a successor is appointed, Adidas said, with leadership roles expected to hand over in early 2023. Rorsted has been credited with driving significant changes in the world’s second largest sportswear group. , including its refocus on direct-to-consumer and digital sales that led to significant market share gains in both Nike’s home territory in the United States and its former market-leading position in China.

“We would like to thank Kasper for his major achievements. During his tenure since 2016, he has strategically repositioned the company and accelerated its digital transformation,” said Thomas Rabe, who chairs Adidas’ supervisory board. “Under Kasper’s leadership, adidas has dramatically improved its digital capabilities and increased its online sales more than fivefold.”

“In North America, the largest sporting goods market in the world, adidas doubled its sales,” Rabe added. “In addition, adidas has reinforced its leadership position in sustainability and increased diversity, equity and inclusion across the company.”

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U.S.-listed Adidas shares fell 3.45% in Monday morning trading to change hands at $82.60 apiece. The group’s German-listed shares fell 3.9%, against a 2.2% drop for the DAX performance index in Frankfurt. Shares of Nike, meanwhile, fell 2.16% to $110.75 each.

Adidas last month slashed its full-year profit forecast by around 30%, in part thanks to Covid restrictions in China hammering sales of its sports gear and apparel in the world’s second-largest economy and lower discretionary spending in Europe.

Adidas said it forecast full-year net profit of around 1.3 billion euros, down from a previous forecast of 1.85 billion euros, but noted that strength in North America and in Latin America helped June quarter sales rise 10% year-on-year to 5.6 billion euros.

Nike, for its part, warned that soaring transportation costs, as well as a strong U.S. dollar, will eat into profit margins in its next fiscal year after posting a stronger-than-expected fourth-quarter profit of 91 cents per month. Share in late June on $12.24 billion windfall revenue as strong gains in its direct-to-consumer business offset a Covid-related sales slump in China.

Gross profit margins narrowed 80 basis points to 45%, just below Street’s estimate of 46.6%, as input and transportation costs rose. North America revenue was down 5%, but direct-to-consumer sales were up 7%, helping to offset both the impact of a stronger US dollar and lower sales in China Covid-related.

James T. Quintero