Adidas struggles to keep its figures up without the controversial Yeezy sales. Despite a 6 % revenue drop in the third quarter and net profits dropping three times as fast, the results were still better than feared.
Earnings totalled 280 million euros, although excluding the impact of the break-up with Kanye West, they rose dramatically from 66 million euros to 270 million euros. Even though Adidas still sold 750 million euros worth of shoes from the cancelled collection this year, it remains a money pit. There will be no more clearance sales this year, which means that the group may have to write off a further 300 million euros.
Sales fell by 6.4 % to 6 billion euros, although excluding currency effects they rose by 1 %. Adidas sold more in all regions except North America. “Better than expected”, CEO Bjørn Gulden said. “We see the interest in our brand and products increasing in all markets and are now experiencing a visibly higher interest from retailers. Our own inventory levels are down 23 %, which is even a little better than we planned.”
Gulden admitted that “our current performance is not good enough”, but says that “we have said from the beginning that we need time to build this fantastic brand”. For the year as a whole, Adidas is now forecasting a slight drop in sales at constant exchange rates and an operating loss of 100 million euros. At the start of the year, the brand was still fearing a loss of almost 10 % in sales and an operating loss of 700 million euros, so any improvement is a win.