Adidas (OTCMKTS: ADDYY) China sales have plummeted within the second quarter amid the ongoing boycott against Western brands, as well as factory closures due to Covid-19. Consumers in China have decided to oppose alleged human rights abuses.
Nevertheless, the sportswear company still raised its full-year sales and profitability forecast after revealing that it had witnessed an increase in demand in China. Adidas hopes that the sourcing network stabilizes by September and that China sales, which fell 16% in the second-quarter, slowly recover.
Within its second-quarter earnings report, Adidas highlighted that revenue had increased everywhere except China, resulting in a 55% hike in second-quarter sales compared to last year.
“We are seeing North America, Latin America and Europe having a very, very strong growth and we are seeing uncertainty in China, but I am very, very convinced that China will be very, very successful also for this year,” Kasper Rorsted, CEO of Adidas, told CNBC’s Squawk Box Europe.
Adidas net income for the second quarter amounted to USD470 Million, a win compared to the previous year’s USD350 Million net loss amid Covid. Additionally, online revenue fell 14% throughout the quarter as more consumers opted to shop in stores as they slowly reopened.
The sportswear giant now anticipates a 20% year-on-year increase in 2021, backed by looming product releases and the ease of Covid restrictions.