Adidas reported a 28% decline in second-quarter operating profit to $398.4 million due to suspending its business in Russia, pandemic-related lockdowns in China and Vietnam, and higher supply chain costs.
The company was able to lock in a 4% increase in currency-neutral revenue. Net income fell to roughly $368.9 million from around $396.5 million during the same period last year.
On July 26, Adidas cut its 2022 financial forecast due to a slower recovery in Greater China. It now expects currency-neutral revenues to grow at a rate in the mid-to-high single digits. Previously, it projected growth between 11% to 13%.
A decline in profit isn’t Adidas’ only cause for concern.
- The company was recently sued over the authenticity of its NHL jerseys.
- Adidas is facing a similar lawsuit filed four months ago. Attorneys for the company have reportedly filed a motion to dismiss.
- On Wednesday, Kanye West claimed Adidas made decisions for Yeezy without his approval.
It’s not all bad. Revenue for the company’s football, running, and outdoor divisions all increased by double digits. During the quarter, Adidas released the first drops of its Gucci collaboration and launched both its new Sportswear collection and the next iteration of its Supernova running franchise.
Adidas X LIV Golf?
On Thursday, Adidas CEO Kasper Rorsted told CNBC that no decision had been made on whether the company would sponsor an LIV Golf team, adding that Adidas wants to “remain a sponsor of the individual.”
