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Adidas’ currency-neutral revenues increased 11% in the second quarter of 2024, driven by the “strong momentum of the underlying business”.
In euro terms, revenues grew 9% to €5.8bn (£4.8bn). Operating profit amounted to €346m (£292m), reflecting an operating margin of 5.9%.
Footwear revenues in Q2 increased 17%, driven by the “strong product offering” in Originals and Football. Meanwhile, apparel sales were up 6%, also driven by strong double-digit growth in Football. Accessories sales declined 8% instead.
Geographically, the brand saw currency-neutral sales in Europe increasing 19% during the quarter, while revenues in Emerging Markets and Latin America also grew double digits, 25% and 33% respectively.
However, revenues in North America decreased 8% due to the smaller Yeezy business. The sale of parts of the remaining Yeezy inventory generated revenues of around €200m (£168m) in the quarter, which is “significantly” below the €400m (£337m) Yeezy sales generated in the prior year.
Adidas also revealed that in the first half of 2024, currency-neutral revenues increased 10% compared to the prior-year period.
In euro terms, revenues were up 6% to €11.2bn (£9.4bn) in H1 while operating profit reached €682m (£575m).
On July 16, the company raised its top and bottom-line guidance as a result of the “better-than-expected” performance during the second quarter.
Adidas now expects currency-neutral revenues to increase at a high-single-digit rate and its operating profit to reach around €1bn (£843m).
In addition, the company 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 revenues of around €150m (£126m) and no further profit contribution during the second half of 2024.
Adidas CEO Bjørn Gulden said: “Q2 was another quarter confirming that we are improving and on the way of again becoming a good and healthy company. We see improved sentiment for the adidas brand globally and we continue to see improved sell-out numbers, both for lifestyle and performance products.
“Given the improved business in Q2 we continue to raise our expectations and are now guiding for a full-year revenue increase in the high single digits and an operating profit of around €1bn (£843m).”
Gulden added: “The improved brand momentum with our consumer happened faster than we had expected. But that does not mean we do not have a lot of work to do. I am convinced we can bring Adidas back to be a very strong and healthy company. To achieve this we will work hard to continue to grow double digits and use this growth to get leverage on our cost base to improve our profitability. Our mid-term EBIT margin target of 10% is achievable despite external challenges.”
