Adidas revenues remain flat in Q1

Apparel company Adidas reported flat currency-neutral revenues in Q1 compared to the same period last year. 

Currency-neutral sales in North America declined 20% to €1.1bn (£959m) during the quarter as the region is particularly affected by the discontinuation of the Yeezy business.

Instead, sales in EMEA grew 4% to €1.9bn (£1.6bn), driven by high-single- digit growth in Wholesale and revenues in Asia-Pacific and Latin America both continued to increase at double-digit rates, to €567m (£494m) and €595m (£518m) respectively. 

Footwear revenues grew 1% during the quarter, reflecting the strong momentum the Adidas brand is enjoying in its Performance categories football, running, outdoor and tennis. Apparel sales declined 3% in the first quarter as this product division is particularly impacted by the high inventory levels in the marketplace.

The company’s operating profit for the quarter amounted to €60m (£52m), reflecting an operating margin of 1.1%. After taxes, the company’s net loss from continuing operations amounted to €24m (£20m). 

For the full year 2023, Adidas continues to expect currency-neutral revenues to decline at a high-single-digit rate due to elevated recession risks in North America and Europe as well as uncertainty around the recovery in Greater China. In addition, there is a revenue loss of around €1.2bn (£1bn) from potentially not selling the existing Yeezy stock.

CEO Bjørn Gulden said: “Great double-digit growth in Latin America and Asia-Pacific, and slight growth in EMEA despite Russia were in line with our plan. This was better than expected and makes us optimistic for the rest of the year. The 20% sales decline in North America – down 5% excluding Yeezy – was in line with our conservative sell-in strategy due to the high levels of inventory and discounts in the market.

“I am extremely inspired by the huge energy and talent our people – the Adidas family – have showcased during the short time I have been here. adidas has all the ingredients to be the best sports brand in the world, to grow strongly and to be a good profitable company. We just need some time. 2023 will be a bumpy year with disappointing numbers, where maximising our short-term financial results is not our goal. It is a transition year to build a strong base for a better 2024 and a good 2025 and beyond.”