The sporting goods giant is trimming its losses in the second quarter by selling off its inventory of Yeezy shoes.
Adidas reported preliminary results for the second quarter on Monday evening.
- Currency-adjusted revenue ends at the same level in the quarter as in the prior year.
- In terms of euros, the company’s revenues declined by 5 percent to 5.34 billion euros, compared to 5.59 billion euros during the second quarter of last year.
- The company’s gross margin increased to 50.9 percent in the quarter, compared to 50.3 percent a year ago.
In October last year, sports equipment giant Adidas opted to end its collaboration with artist Kanye West, after the rapper repeated last year’s Antisemitic statements.
Sales of the Yeezy line of shoes have completely ceased. According to Adidas’ quarterly report for the first quarter of 2023, the company lost NOK 4.7 billion in halting sales.
Since then, Adidas has been trying to figure out how to get rid of inventory. At the end of May it became clear that they would be selling the remaining models through their website and app.
Inventory in millions of euros
Adidas Upper and Bottom increased profits by selling remaining inventory of “Yeezy” shoes, the company said in a press release. In addition, the accounting numbers were better than expected.
With a remaining €400 million in Yeezy footwear backlog, the company now expects to report an operating loss of €450 million, down from a previous estimate of €700 million.
Future Yeezy launches could improve the company’s numbers, the company writes.
As a result, the company has updated its outlook for this year. Adidas now expects currency-adjusted revenue to decline at a so-called high single-digit rate in 2023, which means less than ten percent.
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