German sportswear company Adidas pared full-year sales and profit forecasts on Wednesday, citing sourcing disruptions and a tough market environment in China after third-quarter results missed analyst expectations.
Adidas reported third-quarter sales up a currency-neutral 3% year on year at 5.752 billion euros ($6.65 billion) while operating profit fell 8.5% to 672 million euros, missing average analyst forecasts for 5.83 billion and 682 million euros respectively.
Adidas shares were down 4.7% in early Frankfurt trade.
CEO Kasper Rorsted told CNBC on Wednesday that there as a divergence between the market environment in Asia and that of Europe and the Americas, where sales continued to grow.
"Double digit growth in the western part of the world and double digit decline in Asia, predominantly due to the corona impact, which is still lasting, and then also political tensions," he said.
"So we should expect that until we have a release of corona (restrictions) in Asia, we are not going to have a full recovery. However, where we are seeing a somewhat normalized setup, we are experiencing double digits and trading as a company above the (2019) level."
Factories in Vietnam, a major supplier to the footwear industry, closed for up to 11 weeks because of COVID-19 outbreaks. Adidas rival Puma has warned that supply bottlenecks would mean a shortage of its products well into 2022.
Adidas said the challenging market in Greater China, COVID-19 lockdowns in the Asia-Pacific region and supply chain disruptions had cut revenue growth by about 600 million euros in the third quarter.
Sales fell 15% in Greater China owing to renewed pandemic restrictions as well as the "geopolitical" situation, the company said.
Western brands including Adidas have faced a consumer boycott in China since March over past statements saying they would not source cotton from Xinjiang after reports of human rights abuses against Uyghur Muslims. Beijing denies any abuses.
Adidas said it still expects 2021 currency-neutral revenue to rise by up to 20%, but it now expects growth to come in lower, without being more specific.
It also expects to reach the lower end of previous forecasts for a 2021 operating margin between 9.5% and 10% and net income from continuing operations of 1.4 billion to 1.5 billion euros.
—CNBC's Elliot Smith contributed to this article.