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Adidas on Tuesday hiked its full-year guidance and posted stronger-than-expected third-quarter earnings, aided by sales of its Yeezy inventory.
The German sportswear giant, in a surprise preliminary estimates release, projected a full-year operating loss of 100 million euros ($106 million), a significant improvement on its previous forecast of a 450 million euro loss, and expects revenues to decline at a low-single-digit rate for 2023.
Third-quarter operating profit came in at 409 million euros, down from 564 million for the same quarter in 2022.
Adidas shares climbed 4% during early trade in Europe on Wednesday.
“While the company’s performance in the quarter was again positively impacted by the sale of parts of its remaining Yeezy inventory, the underlying adidas business also developed better than expected,” Adidas said in its earnings report.
The company terminated its partnership with Ye, formerly known as Kanye West, in October 2022 after the rapper made a series of offensive and antisemitic remarks. It has since been working to sell off its remaining inventory of his trademark Yeezy sneakers.
“Including the positive impact from the two Yeezy drops in Q2 and Q3, the potential write-off of the remaining Yeezy inventory of now around € 300 million (previously: € 400 million) and one-off costs related to the strategic review of up to € 200 million (unchanged), adidas now expects to report an operating loss of around € 100 million in 2023 (previously: loss of € 450 million),” the company said.