Adidas loses contract as a supplier to German Football Association (DFB) to Nike after 77 years

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Bankinter| Adidas loses the contract as supplier to the German Football Association (DFB) to Nike from 2027 until 2034. ADR falls -4.6% in NY.

Adidas has been the official sponsor of the DFB for 77 years; its contract expires at the end of 2026. The DFB explains that Nike’s financial offer was the best “by far”. Some media reports suggest it could have been as much as €100m/year.

Analysis: If this figure is true, the impact on Adidas’ sales is minimal (0.5% of the total), but in reputational terms it means the loss of one of its most emblematic sponsorships and joins other recent problems such as the cancellation of its alliance with the rapper Kanye West, which has weighed down its performance in 2023, forcing the group to sell at cost the Yeezy trainers with a negative impact on EBIT of -€700m. Adidas recently announced its guidance for 2024 which disappointed, with an expected operating profit of €500m compared to the consensus estimate of around €1.3bn at the time (already adjusted to €850m) and mid-single digit sales growth at constant exchange rates. The EBIT margin target of 10% in 2026 ( versus 1.3% in 2023) will not be easy to achieve in an environment of slowing demand, negative impact from exchange rates and the sale of the remaining Yeezy stocks.

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