May 9, 2018
Adidas expects "normalisation" in 2018 after strong growth, sees ongoing sourcing shift from China to Vietnam
May 9, 2018
Adidas CEO Kasper Rorsted said on Thursday that the firm expects sales growth to “normalise” this year after two years of strong expansion, and that it will continue its footwear sourcing shift from China to Vietnam.
“We do expect a certain normalisation this year, following the second consecutive year of strong double-digit growth rates,” Kasper Rorsted said according to a speech text he was giving at the annual general meeting.
He reiterated a target for sales to grow around 10 percent in 2018 on a currency neutral basis, down from 16 percent in 2017.
The chief executive also added that the firm expects a shift in its sourcing of footwear from China to Vietnam to continue although he shrugged off concerns on Wednesday about the possible imposition of U.S. tariffs on Chinese-made shoes.
Factories in Vietnam produced 44 percent of Adidas footwear volume in 2017, up from 31 percent in 2012, while Chinese suppliers made 19 percent, down from more than 30 percent in 2012, Kasper Rorsted told a annual meeting of shareholders.
"I'm not going to rule out that this trend is going to continue," he said, adding: "China is still an important procurement market, irrespective of trade duties."
Rorsted noted that there was still a lot of uncertainty over what sectors could face new U.S. tariffs. "We might be hit by import duties but it will also apply to our competitors."
German rival Puma , which makes about a third of its products in China, said last month that it is working on contingency plans to move some production from China to other Asian markets if U.S. tariffs are imposed.
Shares in Adidas were hit last week after it predicted that sales in western Europe will stall in the second quarter.
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