The German sporting goods provider Adidas AG suffered another loss in sales and operating profit in the third quarter of the current 2023 financial year. However, the results were less bad than the company had previously expected. The board therefore raised the targets for the full year again on Tuesday evening.
According to preliminary figures, group sales in the period from July to September amounted to almost 6.0 billion euros. This was six percent below the level of the same quarter of the previous year. However, adjusted for exchange rate changes, revenue grew by one percent.
The operating result shrank by 27 percent from 564 to 409 million euros, the operating margin, which was 8.8 percent in the third quarter of 2022, fell to 6.8 percent.
Adidas is benefiting from sales of Yeezy products and surprisingly good results in its core business
The company was satisfied with the results: “While the company’s sales and profit development in the third quarter was also positively influenced by sales of part of the remaining Yeezy inventory, the underlying Adidas business also developed better than expected,” it says in a statement.
The surprisingly solid figures prompted the board to raise its annual forecasts. A currency-adjusted decline in sales in the low single-digit percentage range is now forecast, after a decline in the mid-single-digit percentage range was previously expected. The operating result adjusted for “one-off effects in connection with Yeezy and the ongoing strategic review” is now expected to reach around 100 million euros. Until now, only “roughly break-even levels” had been promised here.
The board now expects a significantly lower operating loss for 2023
In addition, the company now only forecasts a reported operating loss of 100 million euros for 2023, after previously expecting a corresponding deficit of 450 million euros. Thanks to “the positive impact of sales of Yeezy products in the second and third quarters,” management now expects “potential write-downs on the remaining Yeezy inventory now amounting to approximately 300 million euros.” Previously, 400 million euros had been estimated here. However, the company continues to expect “one-off costs in connection with the strategic review” of up to 200 million euros.