(Berlin) The German sports equipment manufacturer Adidas raised its annual objectives on Tuesday, driven by “better than expected” activity in the third quarter, and by the sale of the last stocks of Yeezy sneakers, after the end of its collaboration with the rapper Kanye West.
Adidas expects its revenue to “decline by a low single-digit percentage rate” from “mid-single digits” previously, it said in a statement.
Its operating profit excluding exceptional items should “reach 100 million euros” rather than “the break-even point” in previous estimates.
This decision is explained by the “performance of the company during the third quarter”, less bad than expected, with a turnover which fell by only 6% over one year, and an operating margin of 6.8%, down 2.0 percentage points.
These results were “positively affected by the sale of part of the remaining Yeezy stocks” while “the underlying business developed better than expected,” the group said in a press release.
PHOTO SETH WENIG, ASSOCIATED PRESS ARCHIVES
The cessation of the marketing of the lucrative Yeezy sneakers designed with Kanye West had thrown the group into the red at the end of 2022 and the beginning of 2023.
The brand with the three stripes is going through a chaotic period since the end in October of its collaboration with the American rapper, now known as Ye, after a series of slips of an anti-Semitic nature.
The cessation of the marketing of the lucrative Yeezy sneakers designed with Kanye West had thrown the group into the red at the end of 2022 and the beginning of 2023. Adidas found itself with numerous stocks of Yeezy shoes, piling up in its warehouses, after having been removed from its shelves.
Adidas was also struggling with difficulties in the Chinese market, long one of its locomotives.
The situation is improving on both fronts.
Adidas manages to gradually sell the rest of these shoes in batches, with part of the profits going to associations fighting against racism and anti-Semitism.
After these sales, the remaining stock should therefore lead the group to an estimated depreciation of around 300 million euros, compared to 400 million previously, Adidas indicated.
In China, where sales had fallen by a third in 2022 in particular due to health lockdowns, activity seems to be picking up again with a 16% increase in turnover in the second quarter.
Adidas’ full results, with updated figures, will be released on November 8.