Adidas said it expects to be able to scale the respective supply over time but it will have an impact on growth © Adidas
Adidas said it expects to be able to scale the respective supply over time but it will have an impact on growth © Adidas

Adidas growth hit by supply chain issues

14 March 2019

Adidas has said that supply chain issues will slow its growth in North America this year.

Despite a successful 2018, Adidas said a lack of capacity at manufacturing plants would impact sales in North America for the first-half of 2019.

In its financial results Adidas said capacity also had been hit by a strong increase in demand for mid-priced apparel.

Kasper Rorsted, chief executive of Adidas, said: “We have an excess demand that we can’t cover due to inefficient capacity at our manufacturing plants. It’s predominantly related to apparel and it’s predominantly related to North America in the first two quarters.”

Rorsted said the overall impact for full-year growth in 2019 was anticipated to be one to two percentage points.

He said: “We will be able to scale the respective supply over time but it will have an impact.”

Speaking to CNBC Rorsted said there were no plans to increase product prices as a result.

“Right now there is no way of mitigating it, but if you look at the overall outlook we're still looking at a 10-14% net earnings growth, which is very strong, and taking the margin to 11.5% in 2019, which was the original target for 2020, so we're pretty much one year ahead of our plan and our targets for 2020,” he said.

In 2018, the brand’s “currency neutral” revenue increased by 8%, with strong support from e-commerce, where revenues grew 36% to more than €2bn.

Last month, Adidas appointed Martin Shankland to the executive board to head up global operations, succeeding Gil Steyaert.

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