In the second quarter of the year, currency-neutral revenues were flat year-on-year, reportedly impacted by the company’s conservative sell-in approach in order to reduce high inventory levels.

In Euro terms, revenues were down by 5% to €5.3 billion. Results were positively impacted by the first sale of some of Adidas’ Yeezy inventory, generating revenues of around €400 million in June.

Footwear revenue was up by 1% in the quarter while apparel sales were down by 3%. Accessories shined with growth of 8%, driven by football products. Finally, lifestyle revenues were down despite high demand.

Wholesale revenues were down by 10% despite double-digit growth in Greater China and Latin America, while growth in direct-to-consumer (DTC) was 16% year-on-year, driven by 14% growth in e-commerce and 19% in own-brand stores.

Currency-neutral sales fell by 16% in North America in the second quarter and increased in Greater China by the same amount. EMEA sales fell by 1% despite double-digit DTC growth, while the Asia-Pacific was up by 7% and Latin America by 30%.

Gross margin for the quarter was up to 50.9%, while net income from continuing operations totalled €96 million.

The first half of the year saw currency-neutral revenues remain flat overall, while revenues declines by 3% in Euro terms to €10.62 billion. Gross margin in the period was down to 47.9% and net income from continuing operations was €73 million.

Looking forward, Adidas is expecting revenues to fall at a mid-single-digit rate, citing elevated recession risks in North America and Europe as well as uncertainty around the recovery in Greater China. In addition, the company’s revenue development will reportedly continue to be impacted by the initiatives to significantly reduce high inventory levels

Adidas CEO Bjørn Gulden said: “Our story is the same as we said at the beginning of the year: We are using 2023 to clean inventories, work on future products, improve the way we work, build better partnerships and lay the foundation for a better 2024 and a good and profitable adidas in 2025 and 2026. 2023 is not about trying to show short-term results.”