Adidas reported strong third-quarter growth across most regions in a sign a revival plan led by chief executive Bjørn Gulden is starting to work.
The German sportswear group said Tuesday that currency-neutral revenue grew by double digits in most places, except North America, where dwindling sales of Yeezy sneakers are still weighing on the region. Group operating profit also jumped to €598 million ($646 million), from €409 million in the same period last year.
Earlier this month, Adidas raised its annual profit target for the third time, amid surging demand for its retro kicks. The company said it now expects to generate operating profit of around €1.2 billion, up from the previous forecast of around €1 billion.
Shares of Adidas rose as much as nearly 3 percent in early trading. The stock had risen 16 percent so far this year through Monday’s close. Rivals Nike and Puma have both posted losses in contrast.
Gulden took over Adidas in January 2023, shortly after the company cancelled its partnership with Ye, following a string of anti-semitic comments by the rapper and designer. Gulden’s plan for Adidas is to reduce the company’s previous reliance on the Yeezy brand, while refocusing the design of new footwear and apparel and streamlining its operations and costs.
His early bet on boosting popular retro products like Samba and Gazelle shoes is paying off, with Adidas shares outperforming cross-town rival Puma. Adidas is currently scaling up volumes for its 70s-era running shoes SL 72. The goal is to close the gap to Nike, which remains the industry leader despite its struggles.
All regions, sales channels and product divisions are now growing, Gulden said in a statement. Even in North America, where sales fell percent, the region returned to positive growth when the Yeezy brand is excluded, he said.
Adidas is nearing the end of its Yeezy inventory, which contributed around €50 million in operating profit during the third quarter, the company has said previously. There will be no further profit contribution in the fourth quarter.
The current momentum is a sign that Adidas has more to offer than just its classic sneakers, according to analysts at Morgan Stanley led by Edouard Aubin. These strong top-line trends are likely to continue in the final quarter and next year, said RBC analysts led by Piral Dadhania.
Eyeing its next big seller, Adidas has said previously it’s preparing more launches in its lifestyle running shoes and its superstar brand.
By Sonja Wind
Learn more:
Case Study | The Strategy That Brought Adidas Back From the Brink
Adidas has mounted one of the more remarkable turnarounds in recent memory after facing a crisis two years ago from the end of its Yeezy business. BoF spoke to chief executive Bjørn Gulden and other members of Adidas’ leadership to unpack how a series of bold decisions on products like its Samba sneaker, a move to refocus the brand on athletes and internal shifts brought Adidas back from the brink.
