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6 May 2022
Adidas Slashes 2022 Forecast amid COVID-19 Lockdowns in China
The index Today
Popular sportswear brand Adidas SE has pruned its fiscal forecast and profit goals for the year, spurred by slump in China sales stemming from the COVID-19 lockdowns in the country.
According to Bloomberg News, Adidas has reduced its gross margin target for 2022 to 50.7%, after previously looking at a 51.5% to 52% increase. The company’s first-quarter earnings in China have plummeted by 35%, as a result of which Adidas has taken to increasing prices in order to compensate for costs incurred by shoes, apparel, and transport.
The company also revealed on Friday that its sales performance and profits will be at the lower end of its forecasts for the year, reported Bloomberg News. However, Adidas has projected an annual revenue increase from 11% to 13% through currency-neutral sales, with the total yearly income to be around 1.8 billion euros to 1.9 billion euros.