Adidas Sees Lower Q3 Sales But Pleased With Yeezy Inventory Sale Benefit

German sportswear firm Adidas AG ADDYY disclosed Q3 FY23 preliminary results and a favorable revised FY23 outlook.

In Q3, the company reported a currency-neutral revenue increase of 1% Y/Y. On a reported basis, revenues declined 6% Y/Y to €5.999 billion. 

The company’s gross margin improved by 0.2ppt Y/Y to 49.3% in Q3. Operating profit stood at €409 million vs. €564 million a year ago, reflecting an operating margin of 6.8% vs. 8.8% prior year. 

The company benefited from selling parts of its remaining Yeezy inventory and witnessed improvement in its underlying business.

Outlook: For 2023, Adidas revised guidance for currency-neutral revenues to decline at a low-single-digit rate (vs. decline at a mid-single-digit rate previously). 

Also, underlying operating profit (excluding one-offs related to Yeezy and the ongoing strategic review) is now anticipated to be around €100 million in 2023 (vs. about the break-even level prior). 

The company now expects an operating loss of around €(100) million in 2023 (vs. a loss of €(450) million earlier). This includes the positive impact from the two Yeezy drops in Q2 and Q3, the potential write-off of the remaining Yeezy inventory of now around €300 million (previously: €400 million), and one-off costs related to the strategic review of up to € 200 million. 

Also ReadAdidas Teams Up With Sony For Exclusive Spider-Man 2 Collection: Here's How To Get Early Access

The company plans to release Q3 & 9M FY23 results on November 8, 2023.

Price Action: ADDYY shares closed higher by 4.90% at $94.61 on Tuesday.

Photo Via Company

Market News and Data brought to you by Benzinga APIs
Comments
Loading...
Posted In: EquitiesLarge CapNewsGuidanceMarketsBriefsEurasia
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!