Adidas optimistic as Q1 sales beat expectations

Adidas' first quarter was better than expected, the company said on Friday, with sales down 1% compared to the same period last year, as investors hope for the German sportswear giant to turn its fortunes around.

Analysts were expecting a 4% decline in sales compared to the first quarter of 2022, according to consensus estimates compiled by the group.

Adidas reported a modest operating profit of €60 million and a gross margin down to 44.8% as higher supply chain costs and increased discounting weighed on results. Analysts had expected a profit of around €15 million.

Adidas, which last year ended a lucrative partnership with US rapper Kanye West, who now goes by the name Ye West, has not said what it plans to do with its stock of unsold Yeezy shoes.

The discontinuation of the Yeezy business weighed on sales in the quarter by about 400 million euros, Adidas said, mainly in the North America, Greater China and EMEA regions.

"The decline in lifestyle and the loss of Yeezy is of course hurting us," said chief executive Bjorn Gulden, who said he was optimistic for the rest of the year.