Sept 20 - Shares in German sports apparel maker Adidas dropped sharply after the company blamed weakening foreign currencies for not being able to meet its targets. Analysts say it could be the first of many European companies to be affected by the strength of the euro, as Hayley Platt reports.
They're the world's second largest sportswear group by sales. But Adidas, owner of the Reebok brand, has issued a surprise profit warning sending shares tumbling almost 6 percent in early trade. One of the reasons given was weakening currencies in a number of countries, including Russia and Japan. Jeremy Batstone from Charles Stanley warns more companies may be hit. SOUNDBITE: Jeremy Batstone, Director of Private Client Research, Charles Stanley, saying (English): "They have cited a weakness in the Japanese yen and U.S. dollar as part of the justification for falling short. I wonder how many other European companies are going to follow Adidas' lead in the wake of the euro strength.." Sales at Adidas have generally beaten expectations over the last few years. But the group said the currency issue, problems at its new Russian distribution centre and poor trading at its golf business means it would miss this year's target. However it remains confident and hopes to achieve sales of 17 billion euros in 2015. Analysts are less optimistic, warning that Adidas remains at risk if commodity prices continue to rise and consumer demand falls.