German sportswear giant Adidas on Thursday slashed its 2022 earnings forecast, blaming poor sales in locked-down China and the economic slowdown in Western markets.
Net income is now expected to be around 500 million euros ($490 million), down from 1.3 billion predicted in August, the group said in a statement.
Revenues are now expected to grow at “a mid-single-digit rate” in 2022, as opposed to a “mid- to high-single-digit rate”, Adidas said.
The dampened forecast “takes into account a further deterioration of traffic trends in Greater China”, it said, citing “continued widespread Covid-19-related restrictions”.
The group also said it was suffering from “lower consumer demand in major Western markets since the beginning of September”, against the backdrop of an inflation-related economic slowdown.
Adidas has been struggling for several months with China’s strict Covid-19 measures, which have hampered its activity in what has become a key market in recent years.
Sales in the country declined at a “a strong double-digit rate” in the third quarter, according to preliminary results published on Thursday.
Net income in the third quarter fell to 179 million euros, from 479 million last year, largely due to the company’s decision to wind down business in Russia, it said.
The group announced earlier this year that it would suspend its activities in Russia in the wake of Moscow’s invasion of Ukraine. (AFP)