Adidas has raised its outlook after an excellent third quarter. The Yeezy debacle seems to be in the past now, thanks to a very unlikely source of revenue…
‘Hot’ shoe from the 1950s
The German footwear giant pushed its third-quarter sales 10 % higher to 6.44 billion euros, while the company was only expecting single-digit growth. Operating profit climbed 46 % to 598 million euros, partly thanks to fifty million euros from the sale of remaining Yeezy stock. There would be an additional fifty million euros of sales from the controversial rapper’s stock this year, but that would not further contribute to profit.
Adidas especially benefits from the fact that its Samba shoes, though already a 1950s model, are currently the “hottest shoe” on the market, as CEO Bjørn Gulden says. The German shoe producer is even experiencing a better period than rival Nike, which is being overtaken by other brands after focusing too much on direct consumer sales. Adidas is also trying to strengthen ties with retail partners and celebrities, including in the United States.
Plotse ommezwaai
For the third time this year, Adidas is therefore raising its forecasts. The brand now expects a 10 % sales growth, which is double than that originally forecast. The company is even counting on an operating profit of 1.2 billion euros, a lot more than double the 500 million previously predicted.
For Adidas and CEO Gulden, it is a welcome turnaround: in March, the label still had to admit its first loss in three decades, while 2022 and 2023 were downright disastrous after the discontinuation of its partnership with the former Kanye West. To make matters worse, the German manufacturer was even brushed aside for the contract with the German football team.
