Adidas, the renowned German sportswear company, has raised its sales and profitability forecast for the full year, despite facing challenges in China. While demand for its products soared in most parts of the world, Western brands, including Adidas, experienced a boycott of their products in China in late March. However, Adidas remains optimistic about its growth prospects.

The company believes its confidence is justified due to the upcoming launch of new products, including updated versions of its popular NMD sneakers, as well as major sports events like the Olympics and the beginning of the club soccer season in Europe. These factors are anticipated to drive sales and enhance profitability.

Adidas reported an impressive 52% rise in sales in the second quarter, amounting to €5.077 billion ($6.01 billion). Its operating profit also exceeded analysts’ expectations, reaching €543 million.

In light of its strong performance, Adidas has adjusted its sales outlook for 2021. The company now expects sales to grow by up to 20%, compared to the previous forecast of a “high-teens percentage rate”. Additionally, it anticipates net income from continuing operations to range between €1.4-1.5 billion euros, up from the previous projection of €1.25-1.45 billion.

Although Adidas witnessed significant growth in regions such as North America, Europe, the Middle East, and North Africa, it encountered challenges in China. Sales in the country declined by 16% due to the strong recovery it experienced the previous year after emerging from coronavirus lockdowns. The boycott in China was a response to Western brands, including Adidas, expressing their refusal to source cotton from Xinjiang due to allegations of human rights abuses against Uyghur Muslims. Beijing has denied these allegations.

Adidas acknowledged the initial drop in demand in China but stated that sales have been gradually recovering. The company refrained from commenting further on the tension in the region and instead referred to the “geopolitical situation”.

Despite the setback in China, Adidas maintains its optimism and confidence in its ability to capitalize on opportunities in other regions. With the planned launch of new products and the buzz surrounding upcoming sports events, the company expects to achieve strong growth and deliver robust financial results for the remainder of the year.

Useful links:
Adidas Official Website
BBC Article on Adidas’ Sales Outlook