by Ludwig Burger
FRANKFURT (Reuters) – Adidas cut its full-year profit target on Tuesday, citing a slower-than-expected recovery in China from pandemic-related restrictions.
The sporting goods maker said in an unscheduled press release that it expects its annual net profit from continuing operations to reach around 1.3 billion euros, while it had previously forecast the bottom of a range of between 1.8 billion and 1.9 billion euros.
“Given the continued widespread coronavirus restrictions, Adidas now expects mainland China revenue to decline at a double-digit rate for the remainder of the year,” the company said.
Initiatives to eliminate excess inventory in the Chinese market will also weigh on margins for the rest of the year, she added.
In other markets, there could be a “potential slowdown in consumer spending” in the second half due to tougher macro conditions.
Adidas also said second-quarter sales rose 10% to 5.6 billion euros, driven by growth in North America and Latin America.
Net profit from continuing operations in the second quarter fell to 360 million euros, from 387 million a year earlier, due to lower margins.
(Report Ludwig Burger; French version Alizée Degorce, edited by Kate Entringer)
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