Adidas scared investors with a sales outlook a week ago. Now comes the next shock for the sporting goods manufacturer from Herzogenaurach - in the form of a downgrade by Moody's. If there are no results in the future, Adidas could slide even further.
In view of the expected losses in the current year, the rating agency Moody's downgraded the sporting goods group Adidas. Instead of "A2", Moody's only rates the number two in the global sporting goods market as "A3", the seventh best of 21 levels on their scale. The agency said the outlook remains negative. In their view, Adidas is unlikely to meet the requirements for a better rating in the next 12 to 18 months either. The new CEO Björn Gulden had announced a loss of up to 700 million euros last week, which is primarily the result of the separation from scandalous rapper Kanye West as the designer of the lucrative "Yeezy" product line.
According to the Moody's study, in order to at least retain the "A3" rating, Adidas would have to return to earnings (EBIT) of around one billion euros before interest and taxes next year. However, the rating agency also sees "growing uncertainty about the longer-term prospects of recovery," especially given persistent inflation and weak consumer sentiment. Gulden's forecast for 2023 "also raises some questions about the core business (excluding Yeezy) and its profitability," write the Moody's analysts.
In the fall, Adidas ended its long-standing collaboration with the eccentric US rapper, among other things because of anti-Semitic statements. Adidas imposed a sales freeze for the "Yeezy" brand designed by West, which had brought billions in sales and high margins for years. Customers paid between $200 and $700 for Yeezy shoes and apparel.
