Footwear giant Adidas announced Tuesday (July 26) that it’s adjusting its outlook for this year downward, citing a slower-than-expected recovery across Greater China since the start of the third quarter and the potential for slowdowns in other markets as a recession looms.
The downward adjustment comes despite adidas’ second quarter results exceeding expectations thanks to “strong momentum in Western markets and a return to growth in Asia-Pacific,” according to the company press release.
The adjusted forecast says the company’s revenues in Greater China will likely decline at a double-digit rate for the rest of this year, with COVID-19 restrictions remaining in place across most of the region, an unexpected result at a time when the company assumed lockdowns would be largely ending.
Still, the overall picture for Adidas remains strong, according to the press release. The company “continues to expect double-digit revenue growth during the second half of the year for the total company,” the press release says.
“In addition to easier prior year comparables, the acceleration will be driven by adidas’ strong product pipeline, the restocking opportunity with its wholesale customers given unconstrained supply as well as the support from major sporting events,” according to the release.
So, while we might not yet see a return to pre-pandemic normalcy in China and the surrounding regions, the global outlook is strong for Adidas for the rest of the year.
Related: Nike Boosts Deals, Partnerships in Bid to Reverse Unprecedented 40% Slump
Meanwhile, things aren’t significantly better for Nike these days.
After hitting an intraday and all-time high of $179 last Nov. 5, the Beaverton, Oregon category leader has suffered an unprecedented reversal of fortune that has taken its stock down by over 40% — a slump previously unseen by Nike whether looking back five, 10 or even 25 years.
As much as the sports-casual, “athleisure” and “sneakerhead” trends are still style segment leaders and showing no signs of slowing down, so far nothing Nike has tried to do has been able to jolt investors from their bearish beliefs and take a fresh look and return the 50-year-old champ to its glory days.
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