BERLIN – Adidas sales remained flat during the second quarter, with the German sportswear brand bringing in 5.34 billion euros in the three months to June 30.
In currency neutral terms, sales were flat. Last year’s sales over the same period totaled 5.6 billion euros.
That brought the German brand’s revenues to 10.62 billion euros for the first half of 2023.
This was as expected, the company’s chief executive officer Bjørn Gulden said in a statement. “We are happy with the way the second quarter developed. 2023 is not about trying to show short-term results,” he explained, adding that he didn’t expect to see “a good and profitable Adidas” until 2025.
Nonetheless, the company’s second-quarter results came in ahead of market expectations. Analysts had predicted Adidas would earn just over 5 billion euros and might see a sales drop of 9 percent.
In its statement on the results, Adidas explained this slightly better-than-expected result was partially due to revenues from the first drop of the Yeezy range in May.
Adidas severed ties with longtime collaborator Kanye West, who helped design the Yeezy products, last October. This left a significant hole in its earnings – sector experts have suggested the collaboration could have been making Adidas as much as around 40 percent of the company’s annual profits due to the line’s favorable pricing.
In its statement on second-quarter results, Adidas said the first drop of the left-over Yeezy products brought in around 400 million euros over the second quarter.
In terms of product categories, sales of footwear rose 1 percent in currency-neutral terms in the second quarter to 3.11 billion euros. Apparel sales fell 3 percent to 1.82 billion euros.
The apparel market for sportswear continues to be overstocked, the company explained in a statement, adding that it was pursuing a conservative strategy in this area as a result. In what it calls its lifestyle category, sales also fell, Adidas reported. Performance categories – that is, the clothing and gear used for sports, rather than streetwear – had “positive momentum,” the statement noted.
Sales of Adidas accessories and gear grew 8 percent over the second quarter to 405 million euros. This growth was driven by increased interest in football, Adidas explained.
Sales in Adidas’ home market of Europe also remained comparatively static, with a decrease of just under 1 percent in currency neutral terms to 1.98 billion euros.
In North America, the decrease was more significant, with sales there falling 16 percent to 1.4 billion euros. Over the same period last year, Adidas had made 1.7 billion euros in North America.
“[North America] is particularly affected by elevated inventory levels in the market,” Adidas explained.
Sales in Latin America and Asia Pacific were positive, with increases of 30 percent and 7 percent respectively. Adidas also saw an 16 percent increase in sales in Greater China.
Adidas had already released preliminary results for this quarter in late July, at which stage it had adjusted guidance for 2023 upwards. The change was partially due to the successful sale of the Yeezy products.
Previously Adidas expected revenues to decline at a high-single digit rate. Now it forecasts declines in the mid-single digits. And instead of an operating loss of around 700 million euros for the whole year, Adidas now expects this to be closer to 400 million euros.
The company’s statement on Thursday suggested there could be more changes to guidance later in the year. The second drop of Yeezy products begins this week and Adidas said: “If successful, this second drop would further improve the company’s results. However, as the results of this drop are yet unknown, it is not accounted for in the company’s current top and bottom line outlook for 2023.”
This story was reported by WWD and originally appeared on WWD.com.
