Adidas Slumps, Kering Rises, Danone Soars

On this episode of Stock Movers:
- Adidas shares plunge as much as 8.6%, the most in over three months after the footwear giant reported weaker than expected revenue growth which offset a margin beat. The lack of guidance upgrade is driven by increased tariff uncertainty and is a further disappointment.
- Kering shares rose 2.7% after the luxury-goods maker reported better-than-expected operating profit but plunging sales at Gucci which is undergoing a second design revamp in three years.
- Danone shares gained the most in three years after sales beat expectations as the French consumer goods company saw volumes rise in most of its categories, including high-protein products.

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Episode Transcript

Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news.

Speaker 2 (00:08):
The Stock Movers podcast, your roundup of companies making moves
in the stock market, harnessing the power of Bloomberg data.

Speaker 3 (00:17):
Let's look at some of the individual stocks that are
on the move today here in Europe. I'm Caroline Hepget
and I'm joined by our Bloomberg Equities reported Chloe Malay. Chloe,
good morning, Good morning. So thinking about European stocks, Adidas
to shares are down.

Speaker 1 (00:32):
Why so, on the surface, the results from Adidas this
morning were actually quite good to the profit be estimates.
That was due to strong demand for its retro sneakers
like the Samba sneakers. We see those all over London.
But this wasn't really enough to have set invest a
concern about two things in particular. So first of all,
it reported weaker than expected revenue growth, so that was

(00:53):
weighed down by the stronger euro and then also the
end of the Easy franchise. And then secondly, and more importantly,
it disappointed investors by only reaffirming and not raising its
annual guidance. And that's obviously despite that uplift in profit
during the second quarter that I mentioned. So that means
that now the guidance actually sits below analysts expectations, and

(01:15):
the reason why the CEO didn't want to raise that
guidance is because of that continuing uncertainty around the impact
of US tariffs. He said that he expects the associated
costs of Adidas products for the US to reach as
much as two hundred million euros this year, and of
course that could have a knock on effect on consumer
demand there So that was the kind of reasoning for

(01:36):
not raising that forecast, but that of course disappointed investors.

Speaker 3 (01:39):
Gosh, I'm surprised that the Yeasy brand, the conclusion of
that is still something that's weighing on addidus. I mean,
that's a really sort of old story, isn't it quite
interested in that? What about luxury names and shoppers are
turning away from Cowing's largest brand, Gucci.

Speaker 1 (01:57):
Yeah, so in the luxury sector we had Carrying but
also ammez and so this is quite interesting because we've
seen with those two, we've seen a continuation of the
trends that we have seen over the last few quarters.
So high in luxury, like Almes is very resilient. You know,
if you can buy it back in bag, you can
buy it whenever, really, so you can buy anything even
when the economy is not good. Whereas the more aspirational

(02:21):
end of the market, so things that Gucci, they struggled
a little bit more in terms of times of economic downturn.
And so we saw that today. So Emmes revenue rose
nine percent in the second quarter and carrying revenue fell
fifteen percent in the second quarter, so we can see
that divergence there, but the shares kind of responded in
the opposite way. So carrying shares actually rose because the

(02:41):
resources was just not as bad as it was expected.
And then also there's a fair bit of enthusiasm for
the arrival of the new CEO, Luca de Mero, who's
coming in in September. There's enthusiasm and hope that he
might turn around the fortunes of Caring, whereas AMA shars
actually fell because it's been trading so strongly and the
earnings momentum just does and look strong enough according to
analysts to kind of justify it continue to justify such

(03:04):
a high valuation.

Speaker 3 (03:05):
Yeah. Absolutely, And I mean, if you really want to
be in with the in crowd, it's all about understanding
what the new artistic director at Gucci Demna, he's going
to deliver and we're going to get first hints of
that in September. But then the big revere will be
at Milan in mark Chare. So the fashionistas have told
me I will have on. Yeah, let's see, okay, Danone

(03:26):
that says that sales also beat expectations Activitia, yogurt and
so on.

Speaker 1 (03:32):
Yeah, so Dan, and yeah, it did did really well
this morning. Shares rose quite a bit, so volumes rose
across all categories, but it was really led by high
protein products. So it's really benefiting from the recent sort
of protein trends. So that's driven of course by people
on GLP ones that kind of need those high protein
products like like yogurt, like dairy, et cetera, but then
also just more generally health conscious consumers and there's a

(03:54):
real drive for for protein products.

Speaker 2 (03:56):
That is.

Speaker 1 (03:57):
Those results were kind of really a vote of confidence
in the turnaround from the CEO, Antoine south Afric, who
took over from the previous year in twenty twenty one,
and that was following kind of a decade of stagnation
for the company. So it seems like he's really turning
things around. Another strong unit was the medical nutrition business,

(04:17):
so that includes infant formula but then also food for
cancer patients and the elderly. That's been boosted by Devon
and China, and there's quite a good growth outlook because
of the aging population, so that's interesting to look at.
And one negative spot was the water catchcrease, so every
involvic Apparently people don't want to buy.

Speaker 2 (04:34):
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