![]() ![]() While adidas continued to limit the supply at the beginning of the year, the company is slowly starting to scale its offering as the year progresses. These products are at the core of the current Terrace sneaker trend and have been benefiting strongly from it. Lifestyle revenues were down during the quarter despite extraordinary demand for the company’s Samba, Gazelle and Campus franchises. Accessories grew 8% during the quarter driven by strong growth in football. Apparel sales declined 3% in the first quarter as this product division is particularly impacted by the high inventory levels in the marketplace and the company’s disciplined sell-in approach in response to it. In addition, the discontinuation of the Yeezy business weighed on the top-line development during the quarter, representing a drag of around € 400 million on the year-over-year comparison, mainly across the North America, Greater China and EMEA regions.ĭespite this significant drag, footwear revenues grew 1% during the quarter, reflecting the strong momentum the adidas brand is enjoying in its Performance categories football, running, outdoor and tennis. The top-line development in Q1 was impacted by significantly reduced sell-in to the wholesale channel as part of the company’s initiatives to reduce high inventory levels, particularly in North America and Greater China. In the first quarter of 2023, currency-neutral revenues were flat versus the prior-year level. It is a transition year to build a strong base for a better 2024 and a good 2025 and beyond.” Currency-neutral revenues reach prior-year level 2023 will be a bumpy year with disappointing numbers, where maximizing our short-term financial results is not our goal. adidas has all the ingredients to be the best sports brand in the world, to grow strongly and to be a good profitable company. I am extremely inspired by the huge energy and talent our people – the adidas family – have showcased during the short time I have been here. All of this will continue, and we still have a long way to go, but I am very happy with the progress we have made and what we have achieved so far. I have spent Q1 working on our product ranges, brainstormed about future innovations, talked to a great number of retailers about improving our cooperations, met suppliers to discuss future strategies, had many of our athletes visiting our campus, and of course started to work on simplifying and speeding up our processes. This is crucial for us to be able to lower discount levels, increase our full price business and re-build brand heat again. We continue to work hard to normalize our inventory levels during the year. Inventories are still too high, but already € 300 million lower than at the beginning of the year. And the reaction from consumers and retailers to our Fear of God launch in April was incredible. Our partnership launches with Bad Bunny, Ronnie Fieg/Kith and Gucci have performed great. But also here we see some positive developments: The Terrace segment is doing very well in all markets and we have started to scale up volumes for our Samba, Gazelle and Campus franchises. The decline in Lifestyle and the loss of Yeezy are of course hurting us. We are very happy to see our Performance categories continue to develop well and grow strongly. The 20% sales decline in North America – down 5% excluding Yeezy – was in line with our conservative sell-in strategy due to the high levels of inventory and discounts in the market. This was better than expected and makes us optimistic for the rest of the year. Total revenues in Greater China were still down 9%, but we achieved double-digit sell-out growth. Great double-digit growth in Latin America and Asia-Pacific, and slight growth in EMEA despite Russia were in line with our plan. “Q1 ended a little better than we had expected with flattish sales and a small operating profit of € 60 million. Inventory position improves sequentially to € 5.7 billion, up 25% versus the prior year.Gross margin down 5.1pp to 44.8% due to higher supply chain costs, increased discounting, inventory allowances, adverse Yeezy impact and negative FX movements.Currency-neutral revenues flat versus the prior year despite adverse Yeezy impact.
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