Adidas issues profit warning as sales suffer

Bloomberg

Adidas AG issued a profit warning after its sales were hit by lockdowns and consumer boycotts in China, offsetting strong momentum in its key western markets.
The German sneaker company said although its second-quarter results are “somewhat ahead of expectations” with strong growth in Western markets, the recovery in Greater China was slower than expected.
Adidas shares fell as much as 4% in early trading. The stock has lost more than a third of its value since the start of the year.
Sales will now rise by mid-to high-single-digits on a currency-neutral basis this fiscal year, down from previous guidance they would grow by 11% to 13%, the company said in a statement. The downgrade also accounts for a potential slowdown in consumer spending in its other key markets where shoppers are reining in purchases amid rising inflation.
The new guidance requires Adidas to grow second-half sales by more than 20% outside of China, something that will require “sizable market share gains,” Jefferies analysts led by James Grzinic said in a note. “At this juncture investors are unlikely to give Adidas the benefit of the doubt.”
Meanwhile, rival brand Puma SE lifted its earnings forecast for the year, citing strong growth in sports such as running, golf and basketball.