Adidas provided further indications that its turnaround is gaining momentum as the sportswear giant shifts its focus towards its overall strategy, rather than the sell-off of remaining Yeezy shoes. While acknowledging that strong sales of Yeezy stocks have helped reduce the projected full-year loss, Adidas executives downplayed expectations for future releases, citing the difficulty of predicting demand for these shoes. Gulden emphasized the need to manage Yeezy releases carefully and assured that the company's guidance was conservative.
The initial Yeezy release contributed a two-percentage-point increase to the gross margin for the quarter. Adidas' outlook for 2023 does not factor in the second Yeezy release, which is being sold through various retailers alongside Adidas' own channels. Analysts from Citi predict that future Yeezy drops could generate approximately 1.5 billion euros in revenues and 700 million euros in earnings after accounting for Adidas' planned charitable contributions.[1] In the second quarter, Adidas donated 10 million euros and allocated an additional 100 million euros for future donations to organizations.
UBS analyst Zuzanna Pusz stated that this suggests the Adidas brand is performing better, with an increasing number of consumers buying products from Adidas' own stores. As part of its strategy, Adidas plans to increase the sales of "terrace" shoes like the Samba and Gazelle, taking advantage of the growing popularity of low-rise rubber-soled shoes.
[1] Forward-looking statements are based on assumptions and current expectations, which may be inaccurate, or based on the current economic environment which is subject to change. Such statements are not guaranteeing of future performance. They involve risks and other uncertainties which are difficult to predict. Results could differ materially from those expressed or implied in any forward-looking statements.
