The world’s second-largest sporting goods company is currently growing at a slower pace than smaller rival Puma.
(Photo: dpa)
Munich The world’s second-largest sporting goods group, Adidas, wants to increase sales and profits by double-digit percentages this year. And this despite the withdrawal from Russia due to the Ukraine war. Revenue should increase by eleven to 13 percent currency-adjusted, said CEO Kasper Rorsted on Wednesday when the balance sheet was presented. Losses of up to 250 million euros in the Russian business are taken into account. Profits are also expected to increase significantly this year.
Last year, Adidas grew more slowly than smaller rival Puma. Revenues increased by a comparable 16 percent to 21.2 billion euros. In the fourth quarter, sales declined slightly. Without the problems in the supply chains, the group would have been able to sell significantly more. Profit from continuing operations more than tripled to almost 1.5 billion euros in 2021.
Adidas has temporarily stopped operating its own stores in Russia and suspended its partnership with the Russian Football Union. “As a company, we condemn all forms of violence and stand in solidarity with all those calling for peace,” Rorsted said. Thoughts and prayers are with the Ukrainian people, the local teams and all those affected. The situation is being monitored very closely and “if necessary, further company decisions will be made”.
Last year, Covid restrictions in production and problems in the supply chains in particular slowed down business. In addition, business in China continues to be difficult, partly because of the boycott of Western brands. Adidas replaced its China boss and now wants to launch even more products developed in China for China. The global effects cost the group a total of more than 1.5 billion euros in sales. “We have achieved strong sales momentum in markets that have not faced major disruptions,” said Rorsted.
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Share buyback will be expanded
The smaller Herzogenaurach local rival Puma had increased sales by 32 percent to 6.8 billion euros for the first time. Puma CEO Björn Gulden forecast growth of at least ten percent for the current year. Adidas is now setting the forecast a little higher with a prospective growth of eleven to 13 percent. Profit from continuing operations is said to be between 1.8 and 1.9 billion euros. The industry leader is the US sporting goods manufacturer Nike with a recent turnover of more than 44 billion dollars.
In light of the global challenges, Adidas wants to keep shareholders happy with an extension of the already promised share buybacks. After completing the sale of the troubled US brand Reebok, the group wants to buy back its own shares for up to 1.5 billion euros – beyond the existing program.
Adidas stock has lost significant value over the past few weeks. Since the high of more than 330 euros, it has recently fallen to around 185 euros.
More: Adidas exchanges the China boss after a drop in sales