Bolstered by better-than-expected Q1 results, Adidas increased its full-year guidance yesterday and saw its stock price increase by 2.7 percent in the US to close at $111.01. The group’s new outlook calls for an operating profit of about €700 million, up from €500 million prior, on mid- to high-single-digit revenue improvement versus prior guidance of a mid-single-digit increase. Currency will significantly impact reported annual revenues, gross margin, and profitability in 2024.
The company’s currency-neutral revenues grew by 8 percent year-over-year in Q1 and by 4 percent in euros to €5.458 billion from €5.274 billion in the year-ago period. Additionally, Adidas’ gross margin expanded by 640 basis points to 51.2 percent as the operating profit hit €336 million.
During the period, the group realized approximately €50 million in operating profit from about €150 million in sales of Yeezy products. Remaining Yeezy inventory, which will be sold off during the final nine months, is forecast to yield approximately €200 million in additional sales with no profit contribution.
