Supply chain shortages, which impacted North America in H1 and will continue into Q3 before “being sorted out” in Q4, will have no impact on Adi’s business across the geography in 2020. On a broader scale, Adidas continues to guide to 5-8 percent topline growth in H2 on an expected acceleration in its overall business.
“The U.S. continues to be a very positive market and we’re not seeing a substantial slowdown,” CFO Harm Ohlmeyer told analysts last week. “Of course, we’ve seen a slowdown in our business due to some of the factors I mentioned.” Those dynamics have also included the increased cost of Adidas air-freighting products into the market. The trading environment continues to be competitive, the senior executive added.
In H1, Adidas North America’s operating profit slipped 6 percent in euros to the equivalent of $294.7 million as six-month revenues across the region rose 5 percent on a currency-neutral basis to the $2.66 billion. Better product, channel mix and lower sourcing costs offset airfreight expenses and less favorable pricing, the company reported. Adidas brand sales were up 5 percent in C$ to $2.43 billion; Reebok sales slipped 1 percent C$ to $228.6 million but realized double-digit growth in Classics. The parent’s North American expenses rose 18 percent in H1 to the equivalent of $778.8 million due to higher operating costs and marketing expenses.
On deck sometime in H2 will be the launch of a Beyoncé-endorsed product collection that will carry into 2020 in a bigger way. No further details on the timing of the debut or distribution strategy were disclosed.
In other footwear news,