Adidas lifts profit outlook as sales ‘exceed expectations’

Adidas today announced its preliminary results for the first quarter of 2024. Currency-neutral revenues increased 8% in the first quarter compared with the year before.

The German sportswear brand has increased its full-year guidance as a result of the "better than expected" performance during the first quarter.

It now expects currency-neutral revenues to increase at a mid-to-high single digit rate in 2024, whereas before it was expected to be mid single digit. 

The operating profit is now expected to reach £598 million (€700 million), compared to previous guidance of £427 million (€500 million).

The brand, which celebrates its 75th anniversary this year, generated revenues of £128 million (€150 million) from its most recent Yeezy collection drop alone, and an operating profit of £42.7 million (€50 million) in Q1.

Adidas decided in February to sell its remaining Yeezy stock, rather than write it off after ending its partnership with rapper Kanye West, with whom it collaborated on the collection.

In its guidance, Adidas assumes that the sale of the remaining Yeezy inventory would result in additional sales of around £171 million (€200 million) and no further profit contribution during the remainder of the year.

Adidas said it "continues to expect unfavourable currency effects to weigh significantly on the company’s profits this year". These are expected to continue to impact negatively upon both reported revenues and gross margin development in 2024.