28 July 2022, Mumbai:
Slower recovery in Greater China and a potential slowdown in other markets reflected in adjusted adidas outlook for financial year 2022.
adidas announced today that the company is adjusting its outlook for the financial year 2022. While second-quarter results were somewhat ahead of expectations reflecting continued strong momentum in Western markets and a return to growth in Asia-Pacific, the company has been experiencing a slower-than-expected recovery in its business in Greater China since the start of the third quarter.
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As a result, adidas now expects currency-neutral revenues for the total company to grow at a mid- to high-single-digit rate in 2022 (previously: at the lower end of the 11% – 13% range).
Because of the less favorable market mix due to lower-than-expected revenues in Greater China as well as the impact of initiatives to clear excess inventories in this market until the end of the year, the company’s gross margin is now expected to be around 49.0% in 2022 (previously: around 50.7%).
Consequently, the company’s operating margin is now forecasted to be around 7.0% in 2022 (previously: around 9.4%) and net income from continuing operations is expected to reach a level of around € 1.3 billion (previously: at the lower end of the € 1.8 billion – € 1.9 billion range).
So far, the company did not experience a meaningful slowdown in the sell-through of its products or significant cancellations of wholesale orders in any other market. Nevertheless, the 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.
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