China sales drop darkens Adidas outlook
The Nike rival now sees net profit for the year coming in at 1.3 billion euros ($1.3 billion) compared to its earlier forecast of between 1.8 and 1.9 billion euros.
Adidas said it now expects a mid- to high single-digit increase in sales for 2022, compared to an earlier forecast of a low double-digit increase.
While its second-quarter results were better than expected thanks to a strong performance in Western countries and a return to growth in Asia-Pacific markets, Adidas said China has disappointed so far in the third quarter which began at the start of this month.
It said "given the continued widespread Covid-19-related restrictions, Adidas now expects revenues in Greater China to decline at a double-digit rate during the remainder of the year."
Adidas said it has not experienced a meaningful slowdown or significant cancellations in other markets.
But it added that its adjusted guidance "also accounts for a potential slowdown of consumer spending in these markets during the second half of the year as a result of the more challenging macroeconomic conditions".
In the April-June quarter sales rose by four percent against the same period last year when stripping out currency fluctuations, with double-digit gains in North America and a strong performance in Europe once Russia is stripped out.
The preliminary results in euros showed a 10-percent increase in sales to 5.6 billion euros.
Net profit came in at 360 million euros for the quarter, down from 387 million for the same period last year, despite a one-time 100-million-euro tax benefit due to clawing back a provision.
Adidas releases its definitive results on August 4.
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