// Adidas operating profit falls by 28% in the second quarter
// Currency-neutral sales rose 4% in the quarter but net income from continuing operations dropped to €360 million euros from €387 million euros in the same period last year
Adidas has said that operating profit fell by 28% in the second quarter to £326 million, as the sportswear giant suffered from suspending business in Russia, higher supply chain costs and Covid-19 lockdowns in China and Vietnam.
The German retailer said currency-neutral sales rose 4% in the quarter but net income from continuing operations fell to £301 million from €387 million in the same period last year.
The business had already cut its 2022 outlook in July, citing slower than expected recovery in China, saying it expects full-year net income from continuing operations to reach about £1.09 billion.
READ MORE:
- Adidas issues profit warning amid slow China recovery & potential for global slowdown
- Adidas finance boss departs after 25 years
- Adidas sports bra adverts banned for showing bare breasts
Revenue growth in the second quarter was driven by Western markets despite last year’s lockdowns in Vietnam still reducing sales, particularly in EMEA and North America.
Adidas CEO Kasper Rorsted commented: “Our Western markets continued to show strong momentum in the second quarter amid heightened macroeconomic uncertainty. With Asia-Pacific returning to growth, markets combined representing more than 85% of our business grew at a double-digit rate.
“With sports back at centre stage this summer, revenues in our strategic growth categories Football, Running and Outdoor all increased by double digits. However, the macroeconomic environment, particularly in China, remains challenging. The recovery in this market is – due to continued COVID-19-related restrictions – slower than expected. And we have to take into account a potential slowdown in consumer spending in all other markets for the remainder of the year.”
Click here to sign up to Retail Gazette‘s free daily email newsletter
