Kasper Rorsted, CEO of Adidas
Adidas, the German group suffers from procurement costs: profit down 10%
The German group Adidas, a sports equipment manufacturer, ended the third quarter with lower profits and lowered its annual gross margin estimates due to high costs associated with supply chain disruptions.
The gross margin it should be between 50.5-51% for the year, compared to the previous target of 52%. In the third quarter, net profit, excluding the positive impact of the sale of the Reebok subsidiary, it drops by 10% to 479 million euros, compared to the same period in 2020, but the annual target was maintained. Loperating profit fell 8.5% to 672 million euros, while group sales increased 3% to € 5.752 billion.
In August, the equipment manufacturer announced that it had sold its Reebok subsidiary, which had accumulated problems, to the American company Authentic Brands Group (ABG) for 2.1 billion euros. Thanks to the revaluation of the rights related to the brand in the financial statements, Adidas was able to register a net gain exceptional of 402 million euros at the end of September, bringing the group's share of the result for the past quarter to 960 million euros.
In the note Adidas then announced a cut on forecasts year-end of the annual gross margin due to the significant costs associated with disruptions in supply chains. The EBITDA margin it should be between 50.5 and 51% at the end of the year, compared with the 52% previously forecast.
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