Adidas Increases Full-Year Guidance Following Strong Q2 Results

adidas AG announced an increase in its full-year guidance after reporting better-than-expected results for the second quarter of 2024. Currency-neutral revenues surged by 11% compared to the previous year, while in euro terms, revenues rose by 9% to €5.822 billion. Excluding Yeezy sales, currency-neutral revenues increased by 16%.

The company's gross margin was at 50.8% in Q2, showing a slight decline from 50.9% last year. However, the underlying gross margin improved due to better sell-throughs, reduced discounting, lower sourcing costs, and a more favorable category mix. The operating profit grew to €346 million, up from €176 million in the previous year.

Based on this strong performance, adidas has adjusted its full-year guidance. The company now expects currency-neutral revenues to increase at a high-single-digit rate, up from the previously forecasted mid- to high-single-digit rate. Operating profit is projected to reach approximately €1.0 billion, an increase from the previous estimate of €700 million.

The company anticipates selling the remaining Yeezy inventory at cost, adding about €150 million in sales without further profit contribution. Unfavorable currency effects are expected to continue impacting profitability and revenue reporting this year.