05 May 2023
If you are covering Adidas’ Q1 results, please find comment from Mamta Valeccha, equity research analyst at Quilter Cheviot:
“There were a number of encouraging signs in Adidas’ Q1 print. The firm reported better than expected China performance, a sequential improvement in inventory reduction and a scaling up of its franchise, such as Gazelle, Samba and Campus, along with accelerating momentum within the performance business.
“Despite this, forward guidance is for negative high single digit growth, which may be disappointing to some. However, this is a marathon not a sprint for Adidas. The company has a number of issues to get through such as rebuilding relationships with suppliers, a growth plan for China and the need to get to a more normalised level of inventory which will put pressure on margins, especially in North America.
“2023 is going to be transition year for Adidas to build a stronger company for 2024 onwards.”
