By Joshua Kirby Adidas again cut revenue and earnings guidance for the year to account for the end of its Yeezy label partnership with designer Kanye West, but said it expects a recovery next year amid a cost-savings program.
The German sporting-goods giant now expects group revenue to grow by a low-single-digit percentage at constant currency, from previous guidance in the mid single digits, it said Wednesday. Net profit from continuing operations should come in at around 250 million euros ($251.9 million) half what it previously expected, with a gross margin of 47% and operating margin of just 2.5%, Adidas said. The revision is the fourth time this year Adidas has lowered its outlook for 2022, and comes after an end to the lucrative Yeezy collaboration following a string of controversies including a recent anti-Semitic outburst from rapper Mr. West. The company, however, expects to see a rebound in the bottom line in 2023. The Russia-related costs won’t recur, while a program to cushion inflation and higher costs should boost 2023 profit by some EUR200 million, Adidas said. Write to Joshua Kirby at firstname.lastname@example.org; @joshualeokirby