Adidas Shares Soar as Company Boosts 2023 Guidance
Adidas Raises Its Guidance, Surprising Investors
Adidas (OTC:) has experienced a 4% increase in shares following the release of its third-quarter results. In a surprising move, the sportswear company has raised its guidance for the year, exceeding expectations.
Positive Outlook Amidst Strong Sales
Previously, Adidas projected a loss of 450 million euros ($106 million) for the year. However, it has now revised its forecast, anticipating a loss of only 100 million euros. This positive shift is driven by the success of its Yeezy shoe line, which has significantly boosted revenue.
A Promising Year for Adidas
Investor confidence in CEO Bjorn Gulden’s ability to turn the company around has grown, resulting in a 40% increase in Adidas shares this year. This surge comes after the termination of the Yeezy partnership with rapper Ye, formerly known as Kanye West, due to his antisemitic remarks.
Analyst Insight: Adidas’ Potential for Positive Surprises
Graham Renwick, an analyst at Berenberg, believes that Bjorn Gulden’s cautious guidance during his tenure has allowed Adidas room for positive surprises. With a strong product cycle and strategic focus on Europe, the U.S., and China, Adidas is poised for continued success.
Fueling a Trend: Adidas’ Focus on Retro Styles
Adidas has responded to market demand by increasing production of the Samba and other “terrace” styles. These rubber-soled sneakers, popular in the 1970s, have made a comeback, and Adidas aims to capitalize on this trend.
Improved Projections for 2023
Adidas expects a low-single-digit decline in currency-neutral revenues for 2023, an improvement from the previously projected mid-single-digit decline. Additionally, the company anticipates an underlying operating profit of 100 million euros for the year, excluding Yeezy sales.
By adapting to market trends and focusing on key regions, Adidas is confidently navigating the sportswear industry. With its revised guidance and strategic initiatives, the company is well-positioned for future success.
