The ongoing delivery problems spoiled the third quarter for Adidas

The ongoing delivery problems caused by plant closings in Vietnam and lower demand in the important Chinese market spoiled the third quarter for the world's second largest sporting goods manufacturer, Adidas. Although the group confirmed its forecast for the year, it now expects to land at the lower end of the range. The Dax company's share then came under pressure. Adidas recently announced a profit from continuing operations of 1.4 to 1.5 billion euros. Sales should continue to grow by up to 20 percent after adjusting for currency effects. In the first nine months, 1.37 billion euros were raised, with sales growth of 24 percent after adjusting for currency effects. Traditionally, however, the fourth quarter is one of the weakest earnings for the Herzogenaurach-based company. Sales growth weakened in the third quarter. The persistently problematic environment in China with a drop in sales of 15 percent, corona-related lockdowns in the Asia-Pacific region and supply chain problems would have dampened sales growth by 600 million euros. According to the information, sales rose by three percent after adjusting for currency effects to EUR 5.75 billion. The growth drivers were Europe and North America, which increased by around nine percent after adjusting for currency effects. For months, the plants in Vietnam, the country with the largest shoe production in the world, were completely closed due to the pandemic. In the meantime, operations have resumed, and Adidas expects full production capacities again by the end of the year. "2021 turned out to be a significantly different year than we all had believed in January," said Adidas CEO Kasper Rorsted. But there is no alternative to the production location in Asia. In China, where Adidas normally not only makes a large part of its sales, but also generates the highest profit margins, it was not only the corona pandemic but also political problems that hampered business. Due to political tensions, the political leadership in Beijing had called for a boycott of Western companies in phases - Adidas had also felt that, it said. Overall, the Herzogenaurach-based company has to cope with sales losses of more than two billion euros.