Global sportswear giants navigate mixed fortunes in latest quarter

Adidas struggles amidst slight recovery

Global sportswear brand Adidas reported a 6 per cent dip in revenue for the third quarter (Q3) of fiscal 2023 (FY23), totalling €5.999 billion. Excluding the impact of Yeezy revenues, the brand managed a 2 per cent currency-neutral revenue increase. The footwear category was a bright spot with a 6 per cent growth, contrasting with a 6 per cent decline in apparel and a 3 per cent fall in accessories. Wholesale revenues fell by 2 per cent, but direct-to-consumer revenues rose by 5 per cent, bolstered by a 10 per cent surge in retail stores and a modest 1 per cent increase in e-commerce sales.

Regionally, Adidas’ North America revenue saw a 9 per cent drop, whereas Greater China recorded a 6 per cent rise. The gross margin inched up to 49.3 per cent, with an operating profit of €409 million.

Puma's steady growth

Germany-based athletic and casual footwear and apparel giant Puma's Q3 FY23 revealed a 6 per cent currency-adjusted sales increase to €2,311.1 million, overcoming a 1.8 per cent negative impact from currency fluctuations. The EMEA region contributed significantly with a 9.9 per cent growth. The Asia-Pacific region grew by 4.6 per cent, and the Americas saw a modest 2.5 per cent increment. The direct-to-consumer business surged by 17.4 per cent, significantly boosting its share to 22.7 per cent. Footwear sales jumped by 11.3 per cent, while apparel saw a slight decline of 0.5 per cent. The gross profit margin modestly increased to 47.1 per cent, but net income fell by 10 per cent to €131.7 million.

Nike's stable performance

American athletic footwear and apparel corporation Nike's Q2 FY24 showed a 1 per cent increase in revenue to $13.4 billion. The Nike brand contributed $12.9 billion, remaining stable on a currency-neutral basis. Growth in the APLA and Greater China regions balanced declines in North America and EMEA. Converse revenues fell by 11 per cent. The company's gross margin improved by 170 basis points to 44.6 per cent, driven by strategic pricing and lower ocean freight rates. Net income saw a significant 19 per cent increase to $1.6 billion, with diluted earnings per share rising by 21 per cent to $1.03.

Under armour holds steady

Leading US-based sports apparel and footwear brand Under Armour reported a stable Q2 FY24 with a revenue of $1.6 billion, mirroring the prior year's performance. Wholesale revenue slightly dipped, but direct-to-consumer sales rose by 3 per cent, led by e-commerce and owned and operated store revenue. North America faced a 2 per cent decline, while international revenues increased by 5 per cent. Apparel revenue grew by 3 per cent, but footwear declined by 7 per cent. The company's gross margin expanded by 260 basis points to 48 per cent. Operating income was robust at $146 million, leading to a net income of $110 million.

ALCHEMPro News Desk (DP)