On July 26, adidas adjusted its guidance for FY 2022 due to the slower-than-expected recovery in Greater China since the start of the third quarter resulting from continued widespread covid-19-related restrictions. adidas now expects currency-neutral revenues for the total company to grow at a mid- to high-single-digit rate in 2022 reflecting a double-digit decline in Greater China.
In the second quarter, adidas’ currency-neutral revenues increased 4 per cent as the brand s continued to see strong momentum in Western markets. This growth was achieved despite continued challenges on both supply and demand. Supply chain constraints as a result of last year’s lockdowns in Vietnam reduced top-line growth by around € 200 million in Q2 2022. In addition, the company’s decision to suspend its operations in Russia reduced revenues by more than €100 million during the quarter.
Revenue growth in the second quarter was driven by Western markets despite last year’s lockdowns in Vietnam still reducing sales, particularly in EMEA and North America, by€ 200 million in total. In addition, the top-line development in EMEA was also impacted by the loss of revenue in Russia/CIS of more than € 100 million. Nevertheless, currency-neutral sales grew 7 per cent in the region. Revenues in North America increased 21 per cent during the quarter driven by growth of more than 20 per cent in both DTC and wholesale. Revenues in Latin America increased 37 per cent while Asia-Pacific returned to growth.
The company’s gross margin declined 1.5 percentage points to 50.3 per cent. .Other operating expenses increased by19 per cent to €2.501 billion. Net income from continuing operations slightly declined to € 360 million.