© Reuters. FILE PHOTO: An Adidas logo is seen at the new Futurecraft shoe unveiling event in New York City, New York, U.S. April 6, 2017. REUTERS/Joe Penney/File Photo
(Reuters) -Sportswear giant Adidas (OTC:) lifted its revenue forecast and cut its expected loss for 2023 on Tuesday, citing Yeezy shoe sales and a stronger core business.
The German company said it now expects an operating loss for 2023 of around 100 million euros ($106 million), from a previously expected 450 million euros.
“While the company’s performance in the quarter was again positively impacted by the sale of parts of its remaining Yeezy inventory, the underlying Adidas business also developed better than expected,” the company said.
Shares in Adidas have gained 34% since the start of the year as investors gain confidence in CEO Bjorn Gulden’s ability to turn the company around after a break-up with rapper Ye triggered by antisemitic comments he made in interviews.
Excluding the cost of ending the lucrative Yeezy shoe range produced in partnership with Ye, Adidas said it now sees an underlying operating profit of 100 million euros, up from break-even previously.
Adidas has been selling its remaining stock of Yeezy shoes since the end of May, helping narrow an expected loss, which was initially forecast as 700 million euros in March.
The most recent Yeezy drops generated a profit of 150 million euros, a spokesperson said. Adidas will be making further donations to charity from the proceeds, he said, without giving a specific amount.
Adidas said third-quarter revenues grew by 1% in currency-neutral terms compared to the same period a year ago, while gross margin improved by 0.2 percentage points to 49.3%.
In a sign of the impact of a stronger euro compared to a year ago, third-quarter revenues in euro terms declined by 6%.
Adidas will report its full third-quarter results on Nov. 8.
($1 = 0.9445 euros)
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