What's going on?

Adidas � the German sportswear maker with the name that everybody pronounces wrong � cut its sales forecast for the year on Wednesday, and its stock slipped and fell 4%.

What does this mean?

The world�s second-biggest sportster reported sales growth of 8% in the third quarter, just shy of expectations, but better profit than predicted: up 19% on the same period last year. Currency headwinds and higher costs for raw materials were offset by stronger margins, as Adidas sold a greater proportion of its wares directly over the internet and through its own stores rather than via retailers, which take a cut.


But Adidas is changing its stripes for the rest of the year, saying that it expects lower sales than previously forecast, albeit with higher profit. Western Europe�s to blame � stiff competition and Brexit gloom left some Stan Smiths on the shelf, literally.

Why should I care?

For markets: Stripes vs. Swoosh.

Adidas� long-standing nemesis, Nike, is gaining momentum in North America again. Up until 2018, Nike was losing Air � but the company raised the bar last quarter, growing 6% in North America. Adidas US grew 16% in the same period, and is generally more popular with snake people (a.k.a. millennials) than Nike. Nevertheless, some are worried that the return to growth of the US�s most valuable fashion brand will give Adidas blisters. Meanwhile, newly unchained Puma is hot on the heels of both companies…

The bigger picture: Europe�s not the be-all and end-all.

Western Europe makes up just 29% of Adidas� global sales, and the company�s growing faster in North America and China; throw in a dash of international ecommerce, and Europe will likely become less important to Adidas in the future. China�s sports industry is exploding, with the government pushing sport and health hard. And Chinese millennials � of which there are 415 million, compared to the entire European population of 743 million � are lapping it up.