Adidas stock saw a significant increase in value after the company made an announcement regarding its full year 2024 earnings guidance. The news came following better-than-expected preliminary results for the second quarter. As a result, Adidas shares rose by 4.42% at 9:07 a.m. London time. The German sportswear giant revealed that it now anticipates its operating profit to reach approximately 1 billion euros for the full year 2024 – a considerable boost from the previous estimate of 700 million euros.
According to Adidas, its revenues spiked by 11% in the second quarter compared to the previous year. When excluding sales of the struggling Yeezy line, the company reported a currency-neutral revenue increase of 16% for the quarter. This positive performance showcases Adidas’ ability to adapt and thrive in a competitive market.
Earlier this year, Adidas made a strategic decision not to write off most of its unsold Yeezy inventory. Instead, the sportswear brand opted to sell the remaining shoes. The Yeezy line, a collaboration with rapper Ye (formerly known as Kanye West), faced setbacks following a series of anti-semitic remarks made by the artist. Despite this, Adidas remains focused on selling the remaining Yeezy inventory at cost, with an estimated additional sales of around 150 million euros for the remainder of the year.
In terms of financial results, Adidas reported an operating profit of 346 million euros in the second quarter of the year. This figure stands in stark contrast to the 176 million euros recorded in the same period the previous year. The company had already raised its 2024 outlook earlier in the year after exceeding expectations with its first-quarter results. In April, Adidas announced an operating profit of 336 million euros for the first three months of the year, a significant improvement from the 60 million euros reported in the same quarter a year earlier.
Adidas’ recent performance highlights the company’s resilience and ability to adapt to changing market conditions. By revising its earnings guidance, focusing on revenue growth, making strategic decisions, and maintaining a positive outlook, Adidas continues to solidify its position as a leading player in the sportswear industry.