// Adidas cut its outlook for 2022 as the business suffers from a slower recovery in China
// Adidas now expects its gross margin to be around 49% in 2022, down from prior guidance of 50.7%
Adidas has issued a profit warning and cut its outlook for the rest of the year after its sales were hit by lockdowns and a slow recovery China, offsetting strong momentum in its key western markets.
The sportswear giant said it expected full-year net income from continuing operations to reach about £1.09 billion, having previously predicted a range between £1.5 billion and £1.6 billion.
As a result, the German business now expects its gross margin to be around 49% this year down from prior guidance of 50.7%.
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Adidas said that while it has not experienced a slowdown in sales in any other market, its adjusted outlook is accounting for a potential slowdown of consumer spending globally and for China it now expects a double-digit decline in sales for the rest of the year.
Sales growth for the whole business is now expected to be under 10% for the full year, against a previous prediction of between 11% and 13%.
The group said in a statement: “Despite these headwinds, Adidas continues to expect double-digit revenue growth during the second half of the year for the total company. In addition to easier prior year comparables, the acceleration will be driven by Adidas’s strong product pipeline, the restocking opportunity with its wholesale customers given unconstrained supply, as well as the support from major sporting events.”