Global sportswear company Adidas reported a 0.6 percent revenue decline for the first quarter, as sales declines in its eastern markets offset double-digit growth in the west.
The Germany-based Adidas reported quarterly revenues of EUR 5.3 billion (USD 5.6 billion), compared to EUR 5.27 billion (USD 554.9 million) in the prior-year quarter. By region, western markets continued to show strong momentum with combined currency-neutral sales growing 13 percent across North America, EMEA (+9 percent) and Latin America (+38 percent).
However, Adidas’ Eastern markets faced several challenges, including Covid-19-related lockdowns in Greater China and Asia-Pacific, weighing on the top-line development in these regions.
As a result, revenues in Greater China decreased 35 percent, also due to strong prior year comparable, and fell 16 percent in Asia-Pacific.
The results hit profits at Adidas hard with net income falling 11 percent to EUR 490 million (USD 515.9 million) during the three months.
Despite the negative impact of Covid-19 restrictions in the East and supply holdups in Vietnam, which affected sales in the West, Adidas remained upbeat about the second quarter. However, it remains cautious on its China market.
“In the east, we will return to growth in Asia-Pacific in the second quarter, while we expect the challenging market environment in Greater China to continue,” said Adidas CEO Kasper Rorsted.
“With strong double-digit growth in the vast majority of our markets, representing more than 80 percent of our business, we are well positioned for success in 2022,” Rorsted added.
Equally affected by Asia’s Covid-19 restrictions, American sportswear maker Under Armour recorded a 3 percent sales lift to USD 1.3 billion for the first quarter, despite a 14 percent revenue decline in its Asia-Pacific market.
The company said net loss for the quarter was USD 60 million, while adjusted net loss was USD 3 million.
“Having successfully executed a multi-year transformation and after delivering a record year in 2021 – we are continuing to serve the needs of athletes amid an increasingly more uncertain marketplace,” said Under Armour president and CEO Patrik Frisk.
“As global supply challenges and emergent Covid-19 impacts in China eventually normalize, we are confident that the strength of the Under Armour brand coupled with our powerful growth strategy positions us well to deliver sustainable, profitable returns to shareholders over the long-term,” Frisk added.