Berlin – The equipment manufacturer Adidas announced Thursday to cut its expected results for 2022, due to the fall in its sales in China due to health restrictions linked to Covid-19 and the economic slowdown in the affected markets.
The German group expects a net profit of 500 million euros this year, against 1.3 billion still expected in August, according to a press release. His earnings were expected to climb by a “mid-single-digit rate”, compared to a previous estimate of a “mid-to-high single-digit rate”. These news teach “take into account a deterioration of trends in China”, adds Adidas, which points to the “continuous generalized restrictions linked to Covid-19.
The group has also been suffering from “lower consumer demand in key satisfied markets” since early September, amid an inflation-linked economic slowdown. The German company has been weighed down for several months by China’s strict health policy with regard to Covid-19, which is hampering its activity in the country where the equipment manufacturer has developed strongly in recent years. Sales in the country fell by a “high double-digit rate” during the third quarter, according to Adidas.
The equipment manufacturer is very exposed in China, which accounts for “3 billion euros in sales” per year, or 16 percent of all its sales worldwide. Net profit for the third quarter reached 179 million euros, against 479 million last year, due in particular to the “liquidation of activities in Russia”, further developed by Adidas on Thursday.
The group announced at the beginning of the year the suspension of its activities in Russia, with a shortfall of 250 million euros in 2022, in the wake of the invasion of Ukraine by Moscow. A rare positive point: the stimulating effect of the “2022 Football World Cup”, which should allow the group to achieve “double-digit” growth for its turnover in the fourth quarter. Adidas will release full results on November 9. (AFP)