German sportswear giant Adidas said yesterday it expected its revenues this year to be higher than previously thought as its business showed signs of recovery.
The group booked an operating profit of €409 million (RM2 billion) between July and September this year, according to preliminary results.
The third-quarter figure was lower than in the same period last year when Adidas recorded a €564-million operating profit, but constituted progress for the outfitter after recent struggles.
Adidas has endured a period of turbulence since October last year when it ended its lucrative tie-up with rapper Kanye West — now known formally as Ye — after he made a series of antisemitic outbursts.
The group stopped production of the highly successful Yeezy line designed with West, leaving it with a vast stash of unsold gear.
But there have been signs of improvement for Adidas, with results boosted by the sell-off of Yeezy stock.
In the third quarter, Adidas’s currency-neutral revenues rose by one per cent on the same period last year. In euros, the figure came in at six billion, a drop of six per cent on 2022.
“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,” the group said in a statement.
As such, Adidas upped its full-year guidance for currency-neutral revenues, targeting a “low-single-digit” decline in 2023 compared with the previous year. Previously the group had expected a “mid-single-digit” drop.
Adidas also expected to record an operating loss of €100 million in 2023, an improvement of €350 million on its previous guidance.
The updated figure included the positive impact of Yeezy sales, as well as a potential write-off of around 300 million for the remaining stock. Also included was a €200-million charge for a strategic review carried out by the sportswear group.
Adidas’s full results will be published November 8. — AFP
