Adidas finally got some good news.
After 2023 marked its first annual loss in decades, the sportswear giant rebounded with a net profit of $205.5 million for the second quarter, the company announced.
Footwear revenue has led the company’s revival and apparel sales have been boosted by the international soccer tournaments, as both the Euro winner (Spain) and Copa América champion (Argentina) are outfitted by the company.
“We now look forward to see this continue with [a] great Olympics in Paris. The start has been sensational,” chief executive Bjørn Gulden said on an earnings call.
Unusually high backlogs in inventory, particularly from the fallout of its breakup with the rapper Ye, had been hurting the company’s bottom line. Adidas said on the call that it had reduced inventory by 18%, which “represents a healthy foundation to support future top-line growth.”
Adidas had cut ties with Ye, the rapper formerly known as Kanye West, in 2022, but has continued unloading his Yeezy sneakers in the years since, which has impacted revenue. Adidas said second-quarter revenues in North America were up, excluding the remaining inventory of the Yeezy brand. “The [sales] decline was solely related to the significantly smaller Yeezy business,” the company said in a statement, without specifying numbers.
Adidas is still dealing with a whistleblower who claimed there was corruption within company leadership in China months ago, and just last week, a controversial ad involving model Bella Hadid. The ad commemorated the 1972 Munich Olympics, where 11 Israeli athletes and coaches were killed during a terrorist attack carried out by Palestinian militant group Black September. Hadid is Palestinian and said “Adidas should have known” about the connection before the ad ran.
