Companies

adidas announces third quarter preliminary results

Oct 19, 2023 Germany

The German-based sportswear company has raised its guidance for the full year, mainly as a result of the continued positive impact of the sale of the remaining Yeezy inventory

In the third quarter of fiscal 2023, adidas’ currency-neutral revenue increased by 1%, as compared to the same period of last year, but declined by 6% in euro terms, totalling 5.99 billion euros. In this period, the company’s gross margin improved by 0.2 percentage points to 49.3% from 49.1% in the same quarter of 2022.

Furthermore, according to the preliminary results, adidas’ operating profit reached 409 million euros in the three months to the 30^th of September, on a comparable basis to the 564 million euros recorded in the third quarter of the previous year, reflecting an operating margin of 6.8% (2022: 8.8%)

“While the company’s performance in the quarter was again positively impacted by the sale of parts of its remaining Yeezy inventory, the underlying adidas business also developed better than expected”, reads the statement.

Therefore, adidas is now expecting its currency-neutral revenue to decline at a low-single-digit rate (previously: decline at a mid-single-digit rate). In addition, the company’s underlying operating profit – excluding any one-offs related to Yeezy and the ongoing strategic review – is now anticipated to reach a level of around 100 million euros in 2023 (previously: around the break-even level).

Including the positive impact from the two Yeezy drops, the potential write-off of the remaining inventory of around 300 million euros (previously: 400 million euros), adidas now expects to report an operating loss of around 100 million euros in 2023 (previously: loss of 450 million euros).

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