Adidas says quarterly sales excluding Yeezy rose in North America

Adidas ADDDF-OTC said on Wednesday its second-quarter revenues in North America, excluding sales of the Yeezy line, rose from last year driven by growth in both wholesale and its own retail.

Including Yeezy, the currency-neutral sales in North America - Adidas’ second-biggest market behind Europe - fell by 8% to 1.3 billion euros ($1.51 billion) in the April to June quarter.

“The decline was solely related to the significantly smaller Yeezy business,” the company said, without specifying how much the sales increased excluding the product line.

In a turnaround led by CEO Bjorn Gulden, Adidas has sought to clear the remaining Yeezy stock after a bruising break-up with rapper Kanye West, who goes by Ye, while striving to boost its brand through its popular retro styles.

In the first quarter of the year, its business in North America had still been impacted by high inventory levels.

However, Adidas said its overall inventories shrunk 18% to 4.5 billion euros as of June 30, compared to a year earlier.

Quarterly apparel sales were up 6%, helped by strong double-digit percentage growth in soccer as the company sold jerseys related to the Euro Cup and Copa America tournaments, it said.

In Europe, Adidas’ currency-neutral sales rose 19% from a year earlier to 1.9 billion euros in the second quarter.

“New in the quarter was to see a positive development also for apparel,” Gulden said in a statement.

Adidas had hiked its full-year guidance and reported preliminary second-quarter results above expectations in mid-July, helped by the popularity of its low-rise multi-coloured Samba and Gazelle sneakers, and weaker sales at rival Nike.

It still expects currency effects to weigh significantly on its profitability this year, but said its mid-term target for a 10% operating profit margin was achievable nonetheless.