Core Viewpoint - Adidas is facing significant challenges regarding product quality and brand image due to recent controversies, despite reporting record revenue growth in Q3 2023 [5][7][9]. Group 1: Recent Controversies - Consumers have raised concerns about the quality of Adidas products, including allegations that a down jacket was actually produced by a third-party manufacturer, Snow Flying, which offered a similar product at a lower price with better specifications [5][6]. - Another incident involved a customer experiencing a product defect with Adidas shoes shortly after purchase, leading to dissatisfaction with customer service [5][6]. Group 2: Financial Performance - In Q3 2023, Adidas reported a 12% year-on-year increase in global revenue, reaching €6.63 billion, marking the highest quarterly revenue in its history [7]. - Operating profit also saw a significant increase of over 20% to €736 million, with the operating margin improving from 9.3% to 11.1% compared to the same period last year [7]. Group 3: Strategic Initiatives - Adidas has implemented strategies focusing on local market penetration, flexible pricing, and product offerings to adapt to changing consumer demands, which have contributed to its recent revenue growth [8][10]. - The company is actively closing underperforming stores in major cities while expanding its presence in lower-tier cities, leveraging partnerships to enhance market reach [10][12]. Group 4: Challenges Ahead - The reforms initiated by CEO Gulden are facing scrutiny as cost-cutting measures have led to quality control issues and negative impacts on brand reputation [9][21]. - Unstable tariff policies and shifting fashion trends pose risks to the sustainability of Adidas's growth strategies, raising questions about the long-term viability of its pricing approach [9][25]. Group 5: Competitive Landscape - Adidas's market share in China has declined from 15% in 2021 to 8.7% in 2024, while competitors like Nike and Anta have gained ground [29]. - Nike's recent investments in the outdoor sports segment and its aggressive marketing strategies in China highlight the competitive pressures Adidas faces in maintaining its market position [28][29].