Adidas experienced a surge in their stock shares after the announcement of an increase in their full-year 2024 earnings guidance. The sportswear company exceeded expectations with their preliminary results for the second quarter, causing an upward trend in their stock value. Shares of Adidas rose by 4.42% at 9:07 a.m. London time following the announcement.
With the release of their second-quarter results, Adidas revealed that they now expect their operating profit to reach approximately 1 billion euros for the full-year 2024. This figure represents a significant increase from the previous estimate of 700 million euros. The company reported an 11% increase in revenues for the second quarter, with a 16% rise in currency-neutral revenue when excluding sales from the Yeezy line.
Adidas faced challenges with its Yeezy line, resulting in decisions to not write off unsold inventory and focus on selling the remaining shoes. The collaboration with rapper Ye, formerly known as Kanye West, came to an end due to his controversial remarks. Despite these challenges, Adidas anticipates additional sales of around 150 million euros from the remaining Yeezy inventory, with no further profit contribution throughout the year.
The second quarter of the year saw Adidas’ operating profit increase to 346 million euros, showing significant growth compared to the 176 million recorded in the same period the previous year. The company revised its 2024 outlook upwards earlier in the year after strong first-quarter results. In April, Adidas reported an operating profit of 336 million euros for the first three months of the year, a substantial improvement from the 60 million posted in the same quarter the prior year.
Adidas’ decision to raise its earnings guidance for 2024 following improved second-quarter results reflects the company’s resilience and ability to adapt to challenges in the market. Despite issues with the Yeezy line and changes in collaborations, Adidas remains focused on driving growth and delivering value to its stakeholders. The positive momentum in their financial performance indicates a promising future for the sportswear brand.
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