adidas (XETR: ADS.DE) announced its 2022 Q2 financial results on August 4, 2022. According to the announcement, net sales were up 10.2% (3 months, YoY). On the other hand, operating profit and net income were down 27.9% and down 24.2%, respectively. In addition, gross margin was 50.3%, down 1.5 pp (3 months, YoY).
The declines of adidas’ profit and gross margin in 2022 Q2 were largely due to the higher supply chain costs and the continued broad-based COVID19 related restriction in Greater China. However, Western countries still shows strong momentum in its demand. Such trends helped adidas improve its net sales.
Reviewing by region, Latin America recorded the sales growth of up 47.5%. It was followed by North America of up 21.3%. On the other hand, Greater China recorded the largest decline in its sales of down 28.3%.
adidas may experience rebound in its sales in Greater China as COVID19-related restrictions in Greater China will be eased. However, the company would have to make efforts continuously for responding the rising industrial prices as well as supply chain constraints in 2022 Q3.
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