The old advertising maxim holds that you cannot buy love, but you can certainly rent a great deal of attention if you are willing to spend more than a billion dollars in a single quarter.
Adidas, the German sportswear giant that served as an official FIFA sponsor and outfitted 14 national teams at this summer's Women's World Cup, reported what might charitably be called a mixed blessing on Thursday. The company sold four times as many jerseys and twice as many soccer balls as it did during the 2022 tournament in Qatar, generating roughly $1.7 billion in event-related revenue. Bjorn Gulden, the chief executive, described the tournament as "like a fairy tale" in a statement to shareholders.
The shareholders, it seems, were reading a different book. Adidas shares fell 17 percent after the company revealed that its marketing investment — which exceeded $1 billion in the second quarter alone — had weighed heavily on profits. Revenue guidance for the full year rose to 9 to 10 percent growth, but profit expectations remained stubbornly unchanged at around $2.6 billion. (Investors, as a rule, prefer their fairy tales to end with margin expansion.)
Mr. Gulden was effusive about the tournament itself, noting that the company's "Backyard Legends" campaign "brought back the love for the game the way we used to play it in the streets." He added that watching Argentina, with Lionel Messi, face Spain, with the young star Lamine Yamal, in a final played with an Adidas ball and officiated by referees wearing the Three Stripes for the first time in tournament history was "unbelievable."
"I think even Adi Dassler would have been proud," Mr. Gulden said, invoking the company's founder.
Whether the founder would have been equally proud of the stock chart is, perhaps, a question better left to the brand historians.
Original story published in adweek.com: "Adidas' World Cup Win Comes at a Cost as Q2 Marketing Spend Tops $1 Billion"