Adidas faces supply chain issues in first half of 2019
14/03/2019
Revenue from the adidas brand grew 9%, driven by double-digit growth in the training and running categories. The Reebok brand saw it sales fall 3% on a currency-neutral basis, which the group attributed to a decline in the sport category.
Direct-to-consumer led the way in terms of sales channels, banking a double-digit increase. This was driven by e-commerce, with revenue from this channel increasing 36% to more than €2 billion.
In a statement on its outlook for 2019, adidas warned that “supply chain shortages” would negatively impact its revenue in the first half of this year. It expects these issues to knock €200-400 million off its 2019 sales, equivalent to 1-2 percentage points. This would result in full-year sales growth slowing to 5-8% on a currency-neutral basis.
Explaining this statement to investors, chief executive Kasper Rorsted said the group’s suppliers, mostly located in Asia, had been unable to keep up with increased demand from the North American market for mid-priced products.
“The volume grew quicker than anticipated and we didn’t respond quickly enough to that demand signal,” he said, adding that there would be a “substantial slowdown” in sales in this region during the first half of 2019.
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