New York, Europe Brief News – Adidas revealed that its operating profit fell by 28% in the second quarter to 392 million euros ($398.43 million).
The decline came as results suffered from suspending business in Russia, higher supply chain costs and COVID-19 lockdowns in China and Vietnam.
The German sportswear firm said currency-neutral sales rose 4% in the quarter, but net income from continuing operations declined to 360 million euros from 387 million euros in the same period last year.
The company had cut its 2022 outlook in July, citing slower than expected recovery in China, and now expecting currency-neutral revenues to grow at a mid- to high-single-digit rate this year.
Last March, Adidas has closed all of its stores and suspending online sales in Russia, joining other sportswear brands that have taken similar actions against the country in the wake of its invasion of Ukraine.
The move was confirmed as the German company published its financial results for 2021 and announced its outlook for 2022.
Adidas is forecasting an 11 to 13 per cent increase in currency-neutral sales for the year ahead, a projection which already reflects up to €250 million (US$276 million) of risk to its business in Russia and Ukraine because of the war. The company has around 500 stores in Russia, according to Reuters.
The decision comes after Adidas suspended its long-term partnership with the Russian Football Union (RFU) on 1st March. The brand has been the kit supplier for Russia’s national soccer team since 2009.
