Adidas announces “better than expected” Q3 results and raises full year guidance

Adidas has announced its preliminary results for the third quarter of 2023, with currency-neutral revenues increasing 1% versus 2022.

The company’s revenue declined 6% to £5.1 billion (€5.9 billion) against £5.5 billion (€6.4 billion) the previous year, but gross margin improved 0.2 percentage points to 49.3% in Q3, from 49.1% in 2022.

Operating profit reached £354 million (€409 million) during the quarter, against £488 million (€564 million) in 2022, reflecting an operating margin of 6.8%.

While the company’s quarterly performance was once again positively impacted by the sale of parts of its remaining Yeezy inventory, the underlying Adidas business also developed better than expected.

This means the company now expects currency-neutral revenues to drop low single-digits for the full-year, compared to a decline of mid-single-digits previously.

Its underlying operating profit - excluding any one-offs related to Yeezy and the ongoing strategic review - is also now anticipated to reach a level of around £86 million (€100 million) in 2023, whereas previously the outlook was for around a break-even level.

Including the positive impact from the two Yeezy drops in Q2 and Q3, and the potential write-off of the remaining Yeezy inventory of now around £260 million (€300 million), Adidas now expects to report an operating loss of around £86 million (€100 million) in 2023, against what was previously forecast at a loss of £390 million (€450 million).