German sportswear company Adidas cut overall sales and profit estimates for the year, citing supply problems and a harsh market environment in China, as quarterly results were lower than expected.
Adidas announced sales in the third quarter, up 3% year-on-year to € 5.752 billion, while operating profit fell 8.5% to € 672 million, compared with estimates for € 5.83 billion and € 682 million. Euros respectively.
The company’s share is falling 3% in Frankfurt.
Adidas said difficult market conditions in China, wider coronavirus lockdowns in the Asia-Pacific region and supply chain problems reduced revenue growth by about € 600 million in the third quarter.
Sales fell 15% in the wider China, due to new restrictions on the pandemic but also due to the “geopolitical” situation.
For 2021, Adidas continues to expect revenue to increase by up to 20%, but now estimates that the increase will be lower, without giving details of what it means.
It also expects to achieve the lower range of previous estimates for the operating margin of 2021, between 9.5% -10% and net profit from continuing operations at 1.4-1.5 billion euros.
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Source From: Capital
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