The German sportswear company Adidas has revealed that, after a better-than-expected second quarter, it is raising its full-year earnings projection. This is the company’s second upward adjustment of the year. Adidas is set to deliver strong second-quarter sales pushed by the success of its low-rise multi-colored Samba and Gazelle sneakers, besides weaker sales at competitor Nike, as predicted.
The company currently expects an operating profit of around € 1 billion for 2024, up from its earlier guidance of around € 700 million and double its prior projections for the year. Chief Executive Bjorn Gulden, who took the helm at the start of 2023, has been spearheading a turnaround following Adidas’ separation from rapper Ye, previously known as Kanye West, which ensued in unsold Yeezy shoes valued at € 1.2 billion.
Adidas reported a 9 per cent rise in second-quarter sales in comparison to last year, reaching € 5.82 billion, exceeding analysts’ average forecast of € 5.58 billion as per LSEG data.
Despite a gross margin of 50.8 per cent for the quarter, marginally lower than last year’s 50.9 per cent and analysts’ expectations of 51.4 per cent, Adidas credited this to reduced Yeezy business in comparison to 2023 levels.
Adidas, Puma, and Nike are banking on growing demand for products like running shoes this summer, with the impending Olympic Games in Paris later this month. They are vigorously sponsoring Olympic athletes and national teams to benefit from on this opportunity.
