Adidas has reported a significant 23% year-on-year decrease in its inventory levels, which now stand at 4.85 billion euros ($5.18 billion). This marks a positive development, especially as many other apparel and footwear retailers, both in the United States and elsewhere, have been grappling with excess stock and resorting to price cuts to clear their shelves.
In light of this positive trend, Adidas struck an optimistic note by highlighting increased interest from retailers in its autumn/winter 2024 range. The German sportswear giant is notably increasing production of popular sneakers such as the Samba to meet the surging demand.
CEO Bjorn Gulden, who has been at the helm since the beginning of the year, has been instrumental in leading a turnaround for the company, which faced challenges due to its separation from rapper Kanye West, also known as Ye. This split left Adidas with unsold Yeezy shoes worth a substantial 1.2 billion euros ($1.3 billion).
Gulden emphasized that the growth of the company’s lifestyle business is being driven by the “terrace” shoe ranges, including the Samba, Gazelle, Spezial, and Campus lines. This successful diversification has contributed to Adidas raising its full-year outlook, with Yeezy shoe sales playing a part in this positive trajectory.
“We see the interest in our brand and products increasing in all markets,” Gulden stated, although he added that the current performance is still “not good enough.” Notably, Adidas is struggling to keep up with the demand for its terrace shoes, as global demand far surpasses the available supply.
Adidas anticipates a loss of 100 million euros ($106 million) this year, a situation stemming from the cessation of the highly profitable Yeezy line, as warned in February. High inventory levels in the United States will continue to impact the company’s operations for some time.
In the Greater China region, Adidas experienced a 5.7% growth in sales in currency-adjusted terms, following a 16.4% growth in the second quarter. The company has been actively working to rebuild its brand presence in China, where it had previously lost market share to competitors.
Regarding Yeezy shoes, Adidas reported global revenue of 350 million euros in the third quarter, although this figure was described as “somewhat lower” than the third quarter of the previous year.
