Adidas closed the third quarter with a decrease in sales of 6%, but discounting exchange rates it had an increase of 1% after several quarters of stagnation.
Taking exchange rates into account, the group’s turnover fell by 6%, to 5,999 million euros. In the first nine months of the year, revenues contracted 4% in euros. If the currency effect is discounted, the evolution was stable.
The company highlights the good evolution of models such as Samba, Gazelle and Special, which are boosting the lifestyle division, but also the negative impact of the suspension of the business in collaboration with the Yeezy brand, of rapper and producer Kanye West, which reduced 450 million euros in sales in the first nine months.
In the first quarter, the brand did not invoice anything, and in the second and third, when the existing stock began to be liquidated, it contributed 750 million euros in sales. In the first nine months of 2022, the brand generated 1.2 billion euros in turnover. Excluding this factor, Adidas’ turnover at constant rates grew by 3% in the first nine months of the year.
Adidas’ profitability continued to suffer: the company reduced its gross margin by 1.4 points in the first nine months, to 48.4%, weighed down by currency and promotional activity. The net result stood at 343 million euros, well below the 736 million in the same period of the previous year. A positive note is the evolution of inventory, which has been reduced by 23 in the last year, to 4,849 million euros.
Adidas maintains its forecasts for the end of the year, after improving them in mid-October. The company anticipates a decline in sales to low single digits and a negative operating result of around one hundred million euros.
Among the factors in its favor, Adidas cites the good output of Yeezy inventory, but recognizes multiple factors against it such as persistent macroeconomic challenges, geopolitical tensions, recession risks in North America and Europe and uncertainty around China’s recovery.
Adidas has been led since the end of last year by Bjørn Gulden, former CEO of Puma. Both companies have a common origin: they were born from the breakup of brothers Adolf and Rudolf Dassler, who started with a joint sneaker business.
The first would found Adidas and the second, Puma. Both maintain their headquarters in the German town of Herzogenaurach.
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