And this is where we look into next year. So the combination freight positive, given the scaling of some of the products that we have, we hope for normalizing or benefits on the production cost as well. So simple terms, FX is a negative next year for the full year, more in the first half than the second half, everything else return slightly positive. That is also something where we will live in the midterm. We always said we want to get to a 50% or plus margin, and that’s required. If you look at our Q3, again, if you get to 50% margin with some of the drags going away over time, we would plot the 50% margin already and then having a normalized infrastructure given the growth that we have on the top line, we have shown in Q3 what’s possible, and we can build on this one.
So that’s roughly where we are.
Operator: The next question comes from the line of Zuzanna Pusz with UBS.
Zuzanna Pusz : I will stick to two. So first of all, maybe to follow up on gross margins. Thank you Harm, that was very helpful to understand the drivers for next year. But I also wanted to follow up and see how we should think about the gross margin in Q4 because, obviously, we are coming from an extremely low base, which had many one-off items last year. So I mean, I think it was 39% last year. So I was just wondering whether the Q3 at Yeezy is the right way to sort of think about the gross margin or what are sort of the puts and takes we should consider when we look at the Q4 gross margin? And then a question maybe just for Bjorn on the performance in Q4. And I think it’s very clear, and I understand that you say you don’t want to pull forward any business into Q4 because that’s not the point of your strategy.
But if I’m not wrong, I think the business in Q4 tends to be a little bit more retail driven, at least has been in the last 2, 3 years. So I was just wondering if you could maybe comment on the current trends you’re seeing. I think some of your peers have mentioned that actually weather had a negative impact on at least for them on Q3 and October was seeing an improvement. So any comment you could make on how sort of retail is developing so far, if that sort of double-digit growth you’re seeing in your own stores is something that could continue into Q4? That would be very helpful.
Bjorn Gulden : Q4, I think historically with adi, and it was the same with Puma, was almost never a profitable quarter because there’s so many movements. And where we’re sitting right now, we will have improved business in our D2C when it gets to the sell-through of the product on full price. I’m 100% sure because we see that trend already. But you know that 2/3 of our business is the wholesale business. And for us to get into a more structured business and not what should I say, hunt the business that is in demand, we would rather have the preorders for Q1, Q2 be fulfilled in a way that we can plan the business they’re now trying to stress Q4. And that’s why, to be very honest with you, for the story of Adi going forward, how we perform in Q4 doesn’t really matter.
I hope you agree and that’s why we’re very relaxed on what numbers we’re showing. And again, we can talk about it at the end of the quarter how our sellout and how our new franchises is working. And I’m very convinced they will do well because they’re doing well also in October. But in the big scheme of things, then what do we do? We take back from retailers. And how do we, what should I say, deliver maybe demand that is there out of the order book of Q1 I think we’ll be very careful. And then the — what should I say — the easy thing is also that we could easily have said, “Let’s make a drop in Q4, so we look good,” but we’re not doing that because we have to really build stone by stone and do the things that are right for the business into ’24 and ’25 and people do that also in Q4.
The demand for the new product is actually very good. So the sell-through thermometer on what is hot is good. And we also clearly see a demand for 3 stripes now also going into apparel, which the high low effect of what’s happening on the footwear side. And again, the order book for Q1, Q2, which wasn’t that great either is now building the order book for Q3. Q4 will be very good. And then the question is how much stress are we putting into this to short term, try to impress you? Or are we now trying them to do what is right for the business also going into ’25. And you know me that we’re now trying to promise you think that we can deliver and making sure that we build stone-by-stone. And that’s why Q4 looks the way it does, so. And then I hand over to Harm for the margin.
Harm Ohlmeyer : Yes. Zuzanna when it comes to the Q4 margin, unfortunately, I’m not going to give you a lot of more details than what you heard before, but the key drag in Q4 will be, again, there’s no easy business plan. And then secondly, there’s significant FX headwind that is coming towards us. But you also need to understand, given where we are after 9 months and having made some progress also in the underlying business and made tremendous progress on the inventory side on the total level of inventory. Now looking into ’24, we want to make sure that we do the utmost in Q4 to have a higher share of good product where the bad product in the inventory, and that’s why we take advantage of it and then get better prepared for 2024. That’s the plan. And I will leave it there.
Operator: The next question comes from the line of Jurgen Kolb with Kepler Cheuvreux.
Jurgen Kolb : Bjorn, first question for you, again, around the order book. Thanks for mentioning also Q1 and Q2 order book. When you last time talked about the order book for the H1 next year, it sounded at least as if that’s a negative one that was down because of especially very reluctant retailers, specifically coming from North America. And I was wondering, as you said, this is building, are we in positive territory, especially also maybe with a little bit more optimism coming from North America? Moving on to the second half, very strong, as you pointed out. Maybe one indication on price and volume. Is there a price component included in this order book? Or is it more like-for-like? And again, also here on North America, if you could give us an indication if you’re seeing good demand from North America also in the second half?
And the second part of the question, Fear of God, a good news, it’s coming to the market. I was wondering if you could share with us some thoughts as to why that took a little bit longer. And if maybe any of the plans related to that category has changed or if that still is as initially planned, but just a little bit of delay here and there?
