Adidas Quarterly Sales Beat Expectations Despite Yeezy Crisis
Adidas said on Friday its first-quarter numbers came in better than expected, although sales dipped 1% from a year-ago period, as investors hope for the German sportswear giant to turn its fortunes around. Adidas (OTC:ADDYY), which last year ended a lucrative partnership with Ye, the rapper formerly known as Kanye West, gave no update on what it plans to do with its stock of unsold Yeezy shoes. The Yeezy crisis hit sales in the reported quarter by around 400 million euros ($441.56 million), Adidas said, mainly affecting revenue across the North America, Greater China and EMEA regions. “The decline in Lifestyle and the loss of Yeezy are of course hurting us,” said CEO Bjorn Gulden. Still, Gulden was optimistic about the rest of the year. The Terrace shoe style is doing well in all markets, he added, and Adidas has started to make more Samba, Gazelle, and Campus shoes. Sales came in at 5.274 billion euros, down from 5.302 billion euros seen in the first quarter of 2022. Analysts expected sales to fall by 4%, according to consensus estimates compiled by the company. North America was the worst hit by the Yeezy debacle, with currency-neutral sales down 20% from last year. Sales in Greater China fell by 9%, while EMEA sales increased 4%. Adidas reported an operating profit of 60 million euros, beating analysts’ expectations of 15 million euros. Its gross margin fell to 44.8% due to the loss of Yeezy sales, higher supply chain costs and discounts.