Adidas shares rise on strong Q2 results, upbeat outlook By Investing.com

Investing.com – Shares of Adidas AG (ETR:) were up on Wednesday following its results for the second quarter of 2024, driven by a resurgence of its brand momentum. The company reported double-digit top-line growth, improved profitability, and a healthier inventory position.

The company said its currency-neutral sales jumped  by 11% in the second quarter, with the underlying Adidas (OTC:) brand accelerating to 16% growth. This growth was evident across all channels and markets.

Based on the Q2 results, Adidas raised its full-year revenue guidance to a high-single-digit increase and projected an operating profit of around €1.0 billion.

“The additional detail confirms strong and broad based revenue growth in 2Q24 across regions, categories and channels,” said analysts from RBC Capital Markets in a note. 

Underlying gross margin improved by approximately 1.5 percentage points to 50.5%, despite currency headwinds. Operating profit climbed to €346 million from €176 million in the prior year.

Footwear, particularly in Originals and Football, led the revenue growth. Apparel also showed improvement, driven by successful jersey sales and expanding product offerings.

Both lifestyle and performance segments reported  double-digit growth, fueled by popular product lines, collaborations, and successful product launches.

Adidas reported strong double-digit growth in Europe, Emerging Markets, and Latin America, while North America was impacted by the decline of the Yeezy business.

The company achieved a gross margin improvement through better sell-throughs, lower costs, reduced discounting, and a favorable product mix.

Adidas maintained a healthy inventory level of €4.5 billion, positioning the company for sustained top-line growth. 

The global sportswear giant attributed its strong performance to increased consumer interest in its products and successful marketing campaigns, including those around major sporting events like the UEFA Euro 2024 and the Copa América.