Adidas’ Lower FY Guidance ‘unsurprising’ due to Lack of Competitiveness
Adidas has posted a 4% increase in currency-neutral revenues for the third quarter, however the German sporting company has lowered its full year 2022 guidance with a GlobalData apparel analyst telling Just Style it lacks competitiveness despite the ongoing demand for sportswear.
By Laura Husband
Adidas’ sales decline in Greater China reflected the continued widespread Covid-19-related restrictions as well as significant inventory takebacks, however its currency-neutral revenues in other markets combined continued to grow at a double-digit rate during the third quarter.
The company’s sales increased 11% to EUR6.408bn (US$6.27bn) in Q3 and the gross margin declined 1 percentage point to a level of 49.1% and operating margin reached 8.8% during the third quarter, compared to 11.7% in 2021.
Net income from continuing operations was EUR179m in Q3 compared to EUR479m in 2021. The bottom-line development during the quarter reflects several one-off costs totaling almost EUR300m on the net income level. The majority of these expenses reflect the company’s decision to initiate the wind-down of its business operations in Russia.
Source: JUST STYLE
https://www.just-style.com/news/adidas-lower-fy-guidance-unsurprising-due-to-lack-of-competitiveness/