StockBeat: Inditex, Adidas Wrestle as Brexit Drama Grinds On

By Geoffrey Smith — Europe’s stock markets were mixed after early trading on Wednesday, unwilling to read too much into another devastating defeat for the U.K. government’s plan for leaving the European Union and weighed on by disappointing updates from two of the continent’s biggest names in apparel.

Inditex (MC:ITX), the owner of fashion chains Zara and Massimo Dutti, fell 4.7% after posting fourth-quarter results that were a little below expectations. However, the shortfall was largely due to foreign exchange factors, and the company both raised its dividend and predicted sales growth would accelerate this year.

As such, the picture is not quite the routine doom-and-gloom that investors have come to expect from retail names – especially since the European Central Bank is now clearly onside when it comes to addressing the currency headwinds.

It’s harder to put a positive spin on Adidas’ (DE:ADSGN) results. The German sportswear company fell 4.7% after saying it will miss its sales target this year due to supply chain constraints, particularly in the key U.S. market where it has staged an impressive comeback in recent years.

German fintech Wirecard (DE:WDIG) is also down 2.9% after news that it has suspended one of its managers pending an investigation into allegations of fraudulent accounting. It said earlier this week it had ‘lost contact’ with Edo Kurniawan, the executive at the heart of the allegations. Five other managers are suspected of “arrestable offences” by the Singapore prosecutors, according to the Financial Times.

If only Cristiano Ronaldo could do for the market in general what he did for Juventus (MI:JUVE).

The Italian soccer club’s shares rose 16% in response to a dramatic and unlikely 3-0 victory over Atletico de Madrid last night, in which Ronaldo scored all three goals. That keeps the club in the lucrative Champions League for another round.