Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Adidas lowers 2022 expectations amid China lockdowns

Published 05/06/2022, 01:47 AM
Updated 05/06/2022, 03:17 AM
© Reuters. A woman wearing a face mask walks past a banner advertising new Adidas store, as the country is hit by an outbreak of the novel coronavirus, in Beijing, China February 20, 2020. REUTERS/Tingshu Wang/Files

© Reuters. A woman wearing a face mask walks past a banner advertising new Adidas store, as the country is hit by an outbreak of the novel coronavirus, in Beijing, China February 20, 2020. REUTERS/Tingshu Wang/Files

BERLIN (Reuters) -Adidas lowered expectations for 2022 after a first-quarter slump as renewed COVID-19-related lockdowns in Greater China continue to hit the German sportswear company.

First-quarter currency-adjusted sales shrank by 3% worldwide, to 5.3 billion euros ($5.58 billion), while profit from continuing operations fell 38%, to 310 million euros, it said on Friday.

In Greater China, sales collapsed by 35% in the first quarter; for the year, revenue is expected to fall significantly due to store closures and strong traffic declines.

The company now expects to come in at the lower end of its 2022 forecast for an 11-13% increase in currency-neutral sales as well as for net income from continuing operations of between 1.8 and 1.9 billion euros.

Adidas (OTC:ADDYY) also cut its operating margin forecast, saying it will remain at the previous year's level of 9.4% instead of increasing to 11%.

"In this environment, characterized by severe external challenges, it is imperative to stay focused on our strategic objectives," said Chief Executive Kasper Rorsted.

"While we will remain agile, we will not jeopardize our long-term growth opportunity for short-term profit optimization."

The company expects a return to growth in the second quarter despite the continued sales decline in Greater China and a 200-million-euro negative impact from supply chain constraints.

© Reuters. A woman wearing a face mask walks past a banner advertising new Adidas store, as the country is hit by an outbreak of the novel coronavirus, in Beijing, China February 20, 2020. REUTERS/Tingshu Wang/Files

In the second half of 2022, net sales are expected to grow over 20%, driven, among other things, by unconstrained supply, strong momentum in Western markets and major sports events.

($1 = 0.9507 euros)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.