FRANKFURT, Germany — German sportswear giant Adidas raised its full-year outlook on Tuesday, saying it had performed “better than expected” in the second quarter (Q2) following a period of turbulence.
Revenues between April and June rose 9 percent to 5.8 billion euros ($6.3 billion) a year earlier, according to preliminary figures.
Second-quarter operating profit closely watched by analysts as a measure of underlying performance jumped to 346 million euros, from 176 million euros in 2023.
The strong performance was in part down to “reduced discounting, lower sourcing costs and a more favorable category mix,” Adidas said.
The “better-than-expected” quarter led the company to hike its revenue guidance. It said it was now aiming for an increase at “a high-single-digit rate” in 2024, up from a “mid- to high-single-digit” target.
Operating profit is expected to reach “around 1 billion euros,” up from an earlier estimate of around 700 million euros.
The improved outlook comes after a rough 2023 for Adidas, which recorded its first annual loss in over 30 years.
The setback came on the back of a costly breakup with the US rapper Kanye West in late 2022 after allegations of antisemitism against the artist.
Since then, Adidas has gradually been selling off its inventory of popular Yeezy products, which were developed with West.
The latest batch to be sold generated an operating profit of around 50 million euros in the second quarter, Adidas said.
The remaining stock was expected to be sold off “at cost” over the remainder of 2024, Adidas said, with no further impact on profits.
In another blow to Adidas earlier this year, the German national team announced it would switch suppliers to US rival Nike from 2027, ending a decadeslong partnership with the homegrown “three-stripes” brand.
Adidas, however, managed to score a surprise hit at Euro 2024 with the pink-and-purple away kit it designed for Germany, which the company last month said had become the fastest-selling away shirt in the team’s history.
Adidas will release its full second-quarter results on July 31.
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