ADDYY Adidas AG (QX)

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 joshua.kirby@wsj.com; @joshualeokirby

(END) Dow Jones Newswires

November 09, 2022 02:09 ET (07:09 GMT)

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