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China lockdowns weigh on Adidas’ Q1 profit

FRANKFURT (AFP) – German sportswear heavyweight Adidas yesterday reported a drop in its profits in the first quarter, as widespread coronavirus lockdowns hurt business in key market China.

The group’s net profit from its continuing operations fell to EUR310 million (USD326 million), from EUR502 million in the same quarter last year.

The setback was accompanied by a three-per cent drop in sales across the board, the group said in a statement. Adidas estimated that “supply-constraints as a result of last year’s lockdowns in Vietnam”, where the group has production facilities, had suppressed as much as EUR400 million in revenues in the first quarter.

At the same time, “COVID-19-related lockdowns” in China and other Asian markets have held back demand for its wares.

The drastic health restrictions added to a “challenging market environment” for Adidas in China, with revenues in the first quarter falling by 35 per cent year-on-year.

The German sports outfitter “will return to growth” in the Asia-Pacific market region, where revenues fell by 16 per cent in the first quarter, Adidas CEO Kasper Rorsted said in a statement.

An Adidas store in Camden Town, London