Adidas has announced the company’s preliminary results for its Q2 2024, with currency-neutral revenues increasing 11 percent versus the prior year. The company’s revenues grew 9 percent to €5.822 billion (2023: €5.343bn). Excluding Yeezy sales in both years, currency-neutral revenues increased 16 percent during the quarter. Adidas continues to surf the wave of success from the Q1 report in May.
The gross margin amounted to 50.8 percent in Q2 (2023: 50.9%). The gross margin of the underlying Adidas business improved significantly, reflecting better sell-through, less discounting, lower sourcing costs and a more favorable category mix. However, the significant reduction of the Yeezy business compared to the prior year negatively impacted the development of the gross margin. The company’s operating result rose to €346 million in Q2 (2023: €176 million), including a profit contribution of around €50 million from selling parts of the remaining Yeezy inventory.
Raising FY guidance
Following the better-than-expected performance during the quarter and considering the current momentum, the company has increased its full-year guidance. Adidas now expects currency-neutral revenues to grow at a high-single-digit rate in 2024 (previously: increase at a mid- to high-single-digit rate). The company’s operating profit is now expected to reach a level of around €1.0 billion (previously around €700 million).
Within its guidance, the company assumes the sale of the remaining Yeezy inventory during the remainder of the year will occur on average at cost. This would result in additional sales of around €150 million and no further profit contribution during the remainder of the year.
The company continues to expect unfavorable currency effects to significantly impact its profitability during the year.These effects will negatively affect reported sales and the development of the gross margin in 2024, particularly in H1.
