By Joshua Kirby

Shares in Adidas AG rise sharply Wednesday after the German sporting-goods major set out optimistic guidance for 2022, including a return to organic growth in China, despite a disappointing end to last year.

At 0820GMT, shares were trading 6.6% higher at EUR197.20.

Fourth-quarter revenue came in below company-compiled consensus expectations at 5.14 billion euros ($5.60 billion), with Greater China suffering a 24% organic decline amid a challenging market environment, Adidas said, setting out 2021 results earlier Wednesday. Nevertheless, the company expects to see a return to Chinese sales growth for 2022, contributing to overall group growth of 11% to 13%. Adidas is also aiming for expansion in its gross and operating margins this year.

The revenue target is higher than previous guidance for the year, and all the more ambitious since it includes a EUR600 million drag in the first quarter on supply shortages, as well as a risk of up to EUR250 million from the Russia-Ukraine crisis, analysts at Bryan Garnier said.

The guidance is reassuring, Citi concurred. Nevertheless, the fourth-quarter miss will remain a cause for concern given the continued weakness in China and underwhelming performance in the United States, the bank said.

Write to Joshua Kirby at joshua.kirby@wsj.com; @joshualeokirby

(END) Dow Jones Newswires

March 09, 2022 03:43 ET (08:43 GMT)

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