Adidas recently announced an increase in its full-year 2024 earnings guidance, leading to a rise in its shares. The German sportswear company is now projecting an operating profit of around 1 billion euros, up from the previously expected 700 million euros. This positive outlook is based on better-than-expected preliminary results for the second quarter of the year.
Adidas reported an 11% increase in revenues in the second quarter, with a notable growth of 16% in currency-neutral revenue when excluding sales of the struggling Yeezy line. The decision to not write off unsold Yeezy inventory and instead sell the remaining shoes is a strategic move by the company. The collaboration with rapper Ye, formerly known as Kanye West, on the Yeezy line came to an end due to a series of controversial remarks made by the artist.
The operating profit for Adidas saw a significant surge in the second quarter, reaching 346 million euros compared to 176 million euros in the same period last year. This substantial increase reflects the company’s successful initiatives and effective financial management strategies.
Adidas had already revised its 2024 outlook earlier this year after surpassing expectations in the first quarter. The sportswear brand reported an operating profit of 336 million euros for the first three months of the year, a notable improvement from 60 million euros in the same quarter a year ago. The consistent growth trend indicates a positive trajectory for Adidas in the coming years.
Adidas’ upward revision of its earnings guidance for 2024 and the promising financial results for the second quarter demonstrate the company’s resilience and ability to adapt to changing market conditions. By strategically managing its key initiatives and partnerships, Adidas is poised for further growth and success in the sportswear industry.