Adidas reported that its revenue in North America decreased as a result of leftover inventory from its former designer partner rapper Ye’s Yeezy line, but it has reiterated its full-year projection and second-quarter earnings that topped forecasts.
The German sportswear company announced impressive quarterly earnings on 16 July and increased its 2024 guidance, aided by the success of its retro-styled Samba and Gazelle trainers as well as lower sales at rival Nike.
It said that the quarter’s 6 per cent rise in its apparel business was driven by sales of jerseys associated with the soccer competitions, the Copa America and the UEFA Euro Cup.
Adidas’s second-largest market after Europe, North America, saw an 8 per cent decline in currency-neutral sales from April to June, amounting to € 1.3 billion (US $ 1.51 billion). In a media call, the business stated that underlying sales, excluding Yeezy, increased by 2 per cent from the same period the previous year.
Although it claimed that the United States would continue trail behind other countries, particularly Europe, it does expect some growth in the country in the second half of the year.
In the wake of Adidas’ painful split from rapper Kanye West, also known as Ye, CEO Bjorn Gulden has attempted to sell off unsold Yeezy stock as the business works to enhance its brand awareness through its well-liked classic styles.
Adidas reported that, as of 30th June, its total inventory had decreased by 18 per cent to 4.5 billion euros from the same time last year. However, CFO Harm Ohlmeyer stated that, as the firm prepares for expansion, it anticipates an increase in inventories in the upcoming quarters.
Adidas’ currency-neutral sales in Europe reached € 1.9 billion in the second quarter, up 19 per cent from the same period last year. Adidas stated that it was still targeting an operating profit margin of 10 per cent by 2026.
