 Mainland China shutdowns, unfavorable FX as well as inflationary pressures are making things tough for the sector  Biggest risk in our view is the sector moving from inventory shortages last year to a glut as early as H2 this year  D/G adidas to Hold from Buy, retain Hold on Nike and Buy on Puma, the latter nimbler in our view against a tough backdrop Another layer of complexity After the March 2021 shock of the BCI event that had many Chinese consumers shift to local Chinese brands from imported Western brands, we were looking with interest to this year’s spring season with what should have been a favorable basis of comparison. Unfortunately, lockdowns in mainland China lasted a bit longer; coupled with the lack of marketing campaigns using local brand ambassadors implies the Chinese market remained tough after being a major profitable driver of growth in recent years. Separately, FX has become quite a headwind as Nike reports in USD and both adidas and Puma are short USD as the currency dominates in their cost base.