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Adidas reports slower growth amid supply chain disruptions in Q3

Jeremy Lim
11 November 2021

Revenues at Adidas increased by 3% to €5.8 billion in the third quarter, as it was hit by global supply chain challenges and pandemic restrictions in the Asian market.

The German sportswear company saw an increase in full-price sales during the quarter, up 8% year-on-year and increment of 64% compared to the level of 2019.

Sales were driven by its own direct-to-consumer channel, with currency-neutral sales rising by 5% year-on-year. This reflects an increase of nearly 20% compared with the equivalent period in 2019.

During the third quarter, Adidas sold the Reebok brand to Authentic Brands Group for a total consideration of up to €2.1 billion.

However, the company cited extensive Covid-related lockdowns across its Asia-Pacific region, a challenging market in China and industry-wide supply chain disruptions for the reduction in revenue growth by about €600m in the past quarter.

Adidas CEO Kasper Rorsted said: "Adidas performed well in an environment characterised by severe challenges on both the supply and demand side.As a consequence of successful product launches, we are experiencing strong top-line momentum in all markets that operate without major disruption.

"Double-digit growth in our direct-to-consumer businesses in EMEA, North America and Latin America is a testament to the strong consumer demand for our products. At the same time, we are navigating through the current world-wide supply chain constraints. Despite all challenges, we are on track to deliver a successful first year within our new strategic cycle."

Looking ahead, the company continues to expect currency-neutral revenues to increase by a rate of up to 20%. Both operating margin and net income from continuing operations are forecasted to reach the lower end of the previously communicated ranges of between 9.5% and 10% and between €1.4 billion and €1.5 billion respectively.

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