In a robust financial update, Adidas has significantly raised its profit forecast for 2024 following stellar performance over recent months.
- The company’s operating profit target for 2024 has been elevated to approximately £1bn, surpassing prior estimates.
- Adidas reported a substantial 14% growth in its brand during the third quarter, contributing to a strong financial outcome.
- Footwear and performance sectors experienced noteworthy double-digit growth, with e-commerce revenues climbing 25%.
- CEO Bjrn Gulden expresses confidence in the brand’s strategic direction, emphasising regional and product division successes.
Adidas has made a decisive move by enhancing its 2024 profit projections to near £1 billion, a response to the company’s recent financial achievements that exceeded initial expectations. Initially projected at around €1 billion, the operating profit target has now been revised to approximately €1.2 billion (£997 million). This adjustment follows an impressive operating profit of €598 million in the third quarter, significantly higher than the €409 million recorded in the same period the previous year. Furthermore, Adidas’ net income from ongoing operations surged to €449 million, driven by double-digit growth within its lifestyle and performance categories, as documented by City AM.
The company’s strong quarterly results were underpinned by a 10% increase in currency-neutral sales, a performance highlighted by a 14% rise in the Adidas brand during the third quarter. CEO Bjrn Gulden acknowledged the quarter’s exceptional performance, noting, “The third quarter was a very strong quarter for us and again better than expected.” He praised the company’s strategy and execution, revealing an underlying growth rate for the Adidas brand of 14%, accompanied by a robust gross margin exceeding 51%, and an impressive operating profit outcome.
Adidas is also witnessing considerable growth across all geographic regions, sales channels, and product categories. Gulden highlighted the brand’s success in both lifestyle and performance segments, emphasising the “very healthy balance” achieved within the business. The company’s sights are set on sustaining this growth momentum, with particular strength noted in Greater China and a positive turnaround in North America. “This shows the strength of the Adidas brand and is a result of the great job our people are doing in all markets and all functions,” Gulden remarked.
Additionally, the brand’s footwear segment enjoyed a substantial 14% increase, fuelled by heightened demand in originals and performance categories such as running and football. Apparel, including accessories, also saw significant gains, largely thanks to fruitful collaborations like those with Wales Bonner. Adidas has recorded a 13% boost in wholesale revenue, alongside a 7% improvement in its direct-to-consumer business. Notably, e-commerce sales, excluding the Yeezy range, saw a remarkable 25% rise. Regionally, the European division of Adidas marked an 18% growth, reinforcing the brand’s strong position across its markets.
Adidas’ enhanced profit forecast reflects its strong market position and strategic execution, with sustained growth across various sectors and regions.
