Adidas revises 2022 outlook amidst ‘slower-than-expected’ recovery in Greater China

The company expects a double-digit decline rate during the rest of the year.

Adidas reported that it has adjusted its outlook for 2022 as it saw a “slower-than-expected” recovery in its operations in Greater China. 

The company had initially expected its currency-neutral revenues to be flat during the second half of the year, but it revised its outlook due to the continued impact of COVID-19. 

“Adidas now expects revenues in Greater China to decline at a double-digit rate during the remainder of the year,” the company said in a statement. 

READ MORE: Adidas, Foot Locker enter strategic partnership

It projected that its currency-neutral revenues will grow at a “mid- to high-single-digit rate” in 2022. This is down from adidas' initial forecast of 11-13%. 

The company also adjusted its projections for its gross margin down to 49% and its operating margin to 7% in 2022 from 50.7% and 9.4%, respectively. 

Moreover, net income from continuing operations is expected to reach a level of around €1.3b, down from €1.8b-1.9b. 

READ MORE: Greater China, APAC drag Adidas’ sales growth in 2021

“Despite these headwinds, adidas continues to expect double-digit revenue growth during the second half of the year for the total company,” the company also said. 

“In addition to easier prior year comparables, the acceleration will be driven by adidas’ strong product pipeline, the restocking opportunity with its wholesale customers given unconstrained supply as well as the support from major sporting events.”