Adidas Issues 2022 Profit Warning as China Sales Struggle to Recover
26 Luglio 2022 - 06:49PM
Dow Jones News
By Joshua Kirby
Adidas AG said Tuesday that it expects sales growth and earnings
to be lower in 2022 than previously forecast as recovery in the key
Greater China market continues to be dragged by pandemic-related
restrictions.
Given the restrictions, Adidas now expects Greater China sales
to decline at a double-digit rate for the rest of 2022. It had
previously guided for second-half revenue to be flat on year in the
market. The company nevertheless still expects double-digit revenue
growth for the company as a whole in the second half.
As a result of the China performance, the German sportswear
giant now expects organic sales growth for 2022 to be in the mid-
to high-single digits. It had previously guided to meet the lower
end of a 11%-13% range.
The resulting less favorable geographic mix and measures to
clear inventory in the market will drag the company's gross margin
to a level of around 49% for the year, from a previous forecast of
around 50.7%, it said. Consequently, the operating margin is
expected to stand at around 7% for 2022, compared with the roughly
9.4% previously forecast, Adidas said.
Net income from continuing operations will as such reach around
1.3 billion euros ($1.33 billion), Adidas said, having previously
been expected at the lower end of a EUR1.8 billion-EUR1.9 billion
range.
Write to Joshua Kirby at joshua.kirby@wsj.com;
@joshualeokirby
(END) Dow Jones Newswires
July 26, 2022 12:34 ET (16:34 GMT)
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