Adidas sees a brighter future despite weak Q3 results

9 November 2023

Adidas has recently released its financial results for the third quarter of the year, revealing notable figures and insights into its performance. In currency-neutral terms, the company experienced a 1% year-on-year growth in revenues. Converted to euros, the revenues exhibited a 6% decline, amounting to €5.99 billion for the quarter. This contrasting performance was observed across various product categories: footwear revenues demonstrated a positive currency-neutral growth of 6% during the quarter, while apparel sales saw a 6% decrease, and accessory sales dropped by 3%.

Adidas managed to achieve currency-neutral sales growth in all of its global markets during the third quarter, with one exception. North America experienced a decline of 9%. In contrast, Greater China saw a 6% year-on-year increase in revenues, primarily driven by wholesale growth. The EMEA region also displayed a positive trend, with a 2% rise in revenues. The Asia-Pacific region saw a robust 7% growth, and Latin America reported a substantial 13% year-on-year revenue increase.

During the quarter, Adidas achieved a gross margin of 49.3%. Operating profit amounted to €409 million, with an operating margin of 6.8%. The net income from continuing operations reached €270 million.

In the first nine months of 2023, currency-neutral revenues remained flat, while revenues, when measured in euros, declined by 4%, reaching a total of €16.62 billion. The net income from continuing operations for the year-to-date was €343 million.

Looking ahead, Adidas anticipates a decline in currency-neutral revenues at a low single-digit rate for the full 2023 fiscal year. CEO Bjørn Gulden expressed the company's outlook, stating: “In Q4, we will continue to focus on our priorities and lay the foundation for an improving 2024 and a successful 2025 and 2026. This year, we improved our outlook every quarter and are now looking at currency-neutral revenues to be down only low single digits (started the year with down high single digits) and a small operating loss of €100 million, including a possible €300 million write-off of the remaining Yeezy inventory and one-off costs of €200 million related to the strategic review. We started the year with a negative outlook of an operating loss of €700 million.”

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