By Joshua Kirby
Adidas AG said Thursday that second-quarter sales were dragged by supply squeezes and a loss of revenue in Russia, as well as by lockdowns in China, as it confirmed preliminary results and new lower full-year guidance.
The German sporting-goods giant’s quarterly sales rose 4% at constant currency to 5.6 billion euros ($5.69 billion,) driven by Europe and the Americas, while revenue in Greater China declined by 35% amid strict lockdowns that strangled demand in the key market. However, the Asia-Pacific region as a whole returned to growth with a 14% increase, Adidas said.
The group said its top line was also weighed by a EUR200 million supply squeeze stemming from last year’s lockdowns in Vietnam, a major sourcing country. In Europe, performance was dragged to the tune of EUR100 million by loss of revenue after closing stores in Russia, the company said.
Setting out preliminary results last week, Adidas slashed its guidance for the full year for the second time in three months, forecasting lower revenue growth and earnings as sales in China struggle to recover.
The new guidance–which includes faster growth in North and Latin America–accounts for potential demand slowdown in markets other than China too, given a more conservative view of consumer spending in the coming months, Adidas said.
Write to Joshua Kirby at [email protected]; @joshualeokirby
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