What's going on?

Adidas posted weaker-than-expected full-year results on Wednesday, but the sportswear giant is still feeling pumped about the year ahead.

What does this mean?

Like most companies, Adidas was up against pandemic-induced shortages and supply chain issues last year. But unlike most companies, it also had to deal with a boycott of its goods in China � a market that makes up over a fifth of its sales. That�s a dastardly combination, and it added up to about $1.7 billion in lost revenue over the course of 2021. That might be why its total sales only climbed 16% last year � short of the 18% it was hoping for. And now that Adidas has stopped selling in Russia, it reckons it�ll sacrifice some growth this year too. Not that the revelation seemed to knock its confidence: Adidas�s revenue outlook for 2022 was still much better than analysts were expecting.

Why should I care?

Zooming in: Adidas goes local.
Adidas�s Chinese sales grew just 3% last year, as customers turned to local brands like Anta Sports and Li Ning instead. That seems to be part of a wider trend: a handful of China�s top sneaker brands collectively grew their revenue by 17% last year, while foreign rivals saw theirs shrink by 24%. Still, at least Adidas can tap into some local know-how going forward: it just hired a new head of Chinese operations with a track record of boosting brands in the region.

The bigger picture: Lululemon�s stepping it up.
Footwear has always made up a big part of Adidas�s sales, but it�s facing new competition on that front: Lululemon announced earlier this week that it�s launching its first sneaker � a running shoe for women � later this month (tweet this). The athleisure brand is planning to expand into men�s sneakers next year, and analysts seem to agree that it could be a smart way to gain ground on the sportswear giants.