Adidas shares rose over 5% on Wednesday after the company reported robust preliminary fourth-quarter results, highlighting a 19% increase in currency-neutral revenue, surpassing expectations.
In euro terms, revenue climbed 24% to €5.965 billion compared to €4.812 billion in the same period in 2023.
Even excluding Yeezy product sales, Adidas achieved 18% revenue growth, showcasing the company’s strong brand momentum.
Adidas demonstrated significant progress in profitability, swinging to an operating profit of €57 million for Q4 2024 from a €377 million loss in the same quarter the previous year. The gross margin also improved by 5.2 percentage points, reaching 49.8%.
For the full year 2024, Adidas reported a 12% rise in currency-neutral revenue, with total revenue increasing by 11% in euro terms to €23.683 billion, up from €21.427 billion in 2023. Excluding Yeezy sales, currency-neutral revenue growth was 13%. Operating profit surged over €1 billion year-over-year to €1.337 billion, a significant improvement from €268 million in 2023.
Adidas CEO Bjørn Gulden expressed satisfaction with the results, stating that the 19% currency-neutral growth in Q4 reflects the brand’s strong momentum.
“Consumer and retailer interest remains robust across all regions and divisions,” he said.
Gulden acknowledged macroeconomic uncertainties but expressed confidence in the company’s ability to achieve double-digit growth and a 10% operating margin in the future.
The strong results boosted Adidas shares by 6.5%, reaching €259.00 in European trading, while shares of its German competitor, Puma, rose 2.2% to €41.52. Analysts at Jefferies attributed Adidas’ performance to a combination of strong brand positioning and improvements in gross margins despite challenges in the broader industry.
Adidas’ performance comes amidst fierce competition in the sporting goods sector. US-based rival Nike is executing a turnaround strategy under CEO Elliott Hill, while emerging brands like On Holding and Hoka gain traction among consumers.
Despite this competitive environment, Adidas has demonstrated the ability to trade at full price, a key indicator of strength, according to Jefferies analysts.
Adidas plans to release its final financial results for 2024 and provide guidance for 2025 on March 5. Looking ahead, the company anticipates double-digit growth for the Adidas brand, continued profitability improvements, and progress toward its 10% margin target.
CEO Gulden also noted opportunities for market share expansion across all regions, even amid economic uncertainties.
“Although we are not yet where we want to be long term, I am very happy with this development, which was much better than expected,” Gulden said.
The Wall Street Journal and Investing.com contributed to this report.
