Adidas reported preliminary first-quarter currency-neutral revenues increased 8 percent versus the prior-year quarter. In euro terms, the company’s revenues grew 4 percent to €5.46 billion, compared to €5.27 billion in Q1 2023. 

The company’s gross margin improved 6.4 percentage points to 51.2 percent of net revenue during the quarter, compared to 44.8 percent in the year-ago quarter. Operating profit reached €336 million in Q1, a €276 million jump from €60 million in the year-ago quarter.

As a result of the better-than-expected performance during the quarter, the company has increased its full-year guidance.

Adidas now expects full-year 2024 currency-neutral revenues to increase at a mid- to high-single-digit rate in 2024, up from its previous forecast for a mid-single-digit increase for the year. The company’s operating profit is now expected to reach around €700 million, up substantially from its earlier forecast calling for approximately €500 million in operating profits.

The latest Yeezy drop generated revenues of around €150 million and an operating profit of around €50 million in the first quarter.

In its guidance, the company assumes the sale of the remaining Yeezy inventory during the remainder of the year will occur on average at cost; this would result in additional sales of around €200 million and no further profit contribution during the remainder of the year.

Adidas continues to expect unfavorable currency effects to weigh significantly on its profitability in 2024. These effects are projected to continue to negatively impact both reported revenues and gross margin development this year.

Image courtesy Adidas