The sporting goods manufacturer Adidas continues to row back for the current year. A slower recovery of business in China due to the corona-related lockdowns and an expected weaker consumer mood in other countries are the reasons for this, the company announced on Tuesday in Herzogenaurach. According to preliminary figures, however, the second quarter was “slightly” better than expected.
For 2022, the management around CEO Kasper Rorsted still expects currency-adjusted sales growth in the mid to high single-digit percentage range – significantly less than before. The reason for this is the “ongoing extensive Covid 19 restrictions” in China. Adidas now expects sales in China to decline by a double-digit percentage for the remainder of the year.
Adidas expects lower profit
Most recently, Adidas had issued a plus at the lower end of the range of 11 to 13 percent. The company now sees the operating margin at 7 percent after the previous target of around 9.4 percent, and profit from continuing operations is also expected to be around 1.3 billion euros, below the previously expected 1.8 billion to 1.9 billion euros.
Adidas’ gross margin is also said to suffer from the reduction in surplus. Instead of the previous forecast of 50.7 percent, Adidas now expects 49 percent.
Positive outlook for the second half of the year
The sporting goods maker emphasizes that the other markets outside of China have not yet seen “any significant slowdown in sell-through of its products or significant cancellations of wholesale orders”. But Adidas is already adjusting its guidance given the difficult macroeconomic conditions and possible slowdown in consumer spending. For the second half of the year, Adidas continues to expect double-digit revenue growth.
According to preliminary figures, adidas sales in the second quarter increased by 10 percent to 5.6 billion euros – mainly thanks to strong double-digit growth in North America and Latin America. The Europe, Middle East and Africa region also recorded increases in revenue in the high single-digit percentage range. Income from continuing operations was €360 million in the second quarter, down from €387 million a year earlier.
Adidas had already become more cautious in May because of the corona restrictions in the important Chinese market. (dpa/FashionUnited)