Adidas, bolstered by its first sell-off of Yeezy styles, is now forecasting a full-year operating loss of about €450 million. That total represents a 36 percent improvement from its prior guidance of an FY23 operating loss of €700 million. If additional sales of Yeezy product are successful, annual results will improve further.
The group, slated to formally release Q2 results on Aug. 3, issued preliminary results yesterday along with updated FY guidance. Revenues declined by 5 percent to €5,343 million in the period ended June 30, but gross margin improved by 60 basis points year-over-year to 50.9 percent from 50.3 percent in Q2/22.
Q2 operating profit fell by 55 percent to €176 million from €392 million in the year-ago period to represent a 3.3 percent operating margin.
The Q2 results were positively impacted by the sale of some Yeezy inventory and a slight improvement in the brand’s underlying business, which developed “slightly better” than forecast.
Adidas is now forecasting FY23 total revenues to fall at a mid-single digit rate versus a high-single digit rate that was predicted earlier. The company’s annual operating profit – excluding one-time expenses related to Yeezy and ongoing strategic review – is still expected to be approximately breakeven.
