Adidas highlighted in its release that second quarter results were slightly ahead of expectations thanks to strong growth in its Western markets and a return to growth in Asia-Pacific. However, the change to its projections for China still constitute a “significant departure from original expectations,” Wedbush analysts Tom Nikic and Ezra Weener wrote in emailed comments Wednesday.
Adidas also expects to be clearing excess inventory in Greater China until the end of the year, impacting gross margin. Nikic and Weener predict the company’s gross margin to be down about 150 basis points in the second half of the year as a result.
