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Adidas has raised its full-year guidance following “better-than-expected” performance during the second quarter of the year.
Preliminary results show that the sportswear brand operating profit in Q2 increased to €346m (£290m), up from €176m (147m) in 2023, including a contribution of around €50m (£41m) from the sale of parts of the remaining Yeezy inventory.
In Q2, currency-neutral revenues increased 11% compared with the prior year, while the company’s revenues grew 9% to €5.8bn (£4.8bn). Excluding Yeezy sales in 2024 and 2023, currency-neutral revenues increased 16% during the quarter.
The brand’s gross margin reached 50.8% in Q2. The underlying Adidas gross margin improved “strongly”, reflecting better sell-throughs, reduced discounting, lower sourcing costs and a “more favourable” category mix.
Adidas now expects currency-neutral revenues to increase at a high-single-digit rate in 2024. The company also expects its operating profit to reach a level of about €1bn (£838m), up from the previous estimate of €700m (£587m).
However, the brand continues to expect unfavourable currency effects to weigh significantly on the company’s profitability this year. Adidas said that these effects are negatively impacting both reported revenues and the gross margin development in 2024, particularly during the first half of the year.
Within the guidance, the company also assumes the sale of the remaining Yeezy inventory during the remainder of the year to occur on average at cost. This would result in additional sales of €150m (£125m) and no further profit contribution during the remainder of the year.
