By Andrea Figueras
Adidas upgraded its full-year guidance on the back of Yeezy inventory reductions and a better-than-expected underlying business, despite a decline in revenue and operating profit in the third quarter.
The German athletic apparel and footwear company said on Tuesday that, according to preliminary results, it now expects currency-neutral revenues to decline at a low-single-digit rate, while it previously forecast a decline in a mid-single-digit rate.
The underlying operating profit–excluding any one-offs related to Yeezy and the underway strategic review–is now estimated around 100 million euros ($105.6 million), up from a prior guidance around break-even level, the company said.
Adidas also said that it now expects to report an operating loss of around EUR100 million this year instead of loss of EUR450 million as it had previously forecast, including the potential write-off of the remaining Yeezy inventory of now around EUR300 million, down from EUR400 million previously.
The company posted a 6% decline in revenue to EUR6 billion, compared with EUR6.41 billion in the year earlier period. Currency-neutral revenues increased 1% compared with the prior year level, it said.
Operating profit fell to EUR409 million during the quarter from EUR564 million in the year-earlier period, while the operating margin was 6.8%, down from 8.8% in 2022. Gross margin improved 0.2% to 49.3%.
Write to Andrea Figueras at [email protected]
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