Economic and Sector Development
In 2022, adidas recorded lower-than-expected results against the backdrop of geopolitical tensions and heightened macroeconomic as well as company-specific challenges. Revenues increased 1% on a currency-neutral basis. The gross margin decreased 3.4 percentage points to 47.3%. Other operating expenses as a percentage of sales were up 3.7 percentage points to 45.6%. The company’s operating margin decreased 6.4 percentage points to 3.0%. Net income from continuing operations decreased 83% to € 254 million. The decline was partly related to one-off costs in the amount of € 350 million. These one-off costs are related to our decision to wind down our business in Russia, a settled legal dispute, higher provisions for customs-related risks, cash-pooling in high inflationary countries as well as to restructuring costs as part of the company’s business improvement program.
Economic and sector development
Global economic growth decelerates in 20221
The global sporting goods industry expanded in 2022 while facing pressure on input costs and supply chains as well as suppressed demand due to lower discretionary spending amid multi-year high inflation rates. In addition, strict coronavirus-related lockdown measures continued to be implemented in parts of the world, particularly in Greater China. While global supply chains were still constrained in the first half of the year as a result of coronavirus-induced factory closures, industry-wide inventory levels increased severely in the second half, leading to heightened promotional activity. Despite these challenges, demand globally benefitted from large-scale sport events, such as the 2022 Beijing Winter Olympics, the UEFA Women’s EURO 2022 in England, or the FIFA World Cup Qatar 2022. Furthermore, existing global trends, such as the increased penetration of sportswear (‘athleisure’) as well as rising awareness for health and wellness, accelerated further. Moreover, consumers are holding sporting goods brands accountable for their sustainability efforts more than ever. Ultimately, brands continued to benefit from an integration of physical retail and online channels amplified by scaling of digital platforms and membership programs. For the sporting goods industry, too, risks of lower consumer demand due to pressured discretionary spending power and a global economic downturn persist.
Sporting goods industry grows moderately in 2022
The global sporting goods industry expanded in 2022 while facing pressure on input costs and supply chains as well as suppressed demand due to lower discretionary spending amid multi-year high inflation rates. In addition, strict coronavirus-related lockdown measures continued to be implemented in parts of the world, particularly in Greater China. While global supply chains were still constrained in the first half of the year as a result of coronavirus-induced factory closures, industry-wide inventory levels increased severely in the second half, leading to heightened promotional activity. Despite these challenges, demand globally benefitted from large-scale sport events, such as the 2022 Beijing Winter Olympics, the UEFA Women’s EURO 2022 in England, or the FIFA World Cup Qatar 2022. Furthermore, existing global trends, such as the increased penetration of sportswear (‘athleisure’) as well as rising awareness for health and wellness, accelerated further. Moreover, consumers are holding sporting goods brands accountable for their sustainability efforts more than ever. Ultimately, brands continued to benefit from an integration of physical retail and online channels amplified by scaling of digital platforms and membership programs. For the sporting goods industry, too, risks of lower consumer demand due to pressured discretionary spending power and a global economic downturn persist.
Regional GDP development1,2 in %
2 Source: World Bank as of January 10, 2023.
3 Includes Emerging Europe and Central Asia.
4 Includes East Asia and Pacific.
1 Source: World Bank Global Economic Prospects.
