“Q2 was another quarter confirming that we are improving and on the way of again becoming a good and healthy company. The consumers are reacting positively to both our marketing and to our product launches. We see improved sentiment for the adidas brand globally and we continue to see improved sell-out numbers, both for lifestyle and performance products”, commented adidas CEO Bjørn Gulden.

Second Quarter Results

As previously announced, in the second quarter of 2024, the company’s revenue increased by 11% on a currency-neutral basis, as compared to the same period of the prior year. “The double-digit growth reflects the strong momentum of the underlying adidas business, which grew 16%”, highlighted adidas.  In euro terms, revenue increased by 9% year-on-year to 5.8 billion euros, as currency developments led to an unfavourable translation impact.

With currency-neutral revenue growth of 17% in the second quarter, as compared to the same period of 2023, the footwear segment continues to lead adidas’ top-line growth. The apparel segment also grew by 6% in the period, driven by the impact of football events. Only the accessories segment underperformed, with sales down by 8% year-on-year.

From a channel perspective. In the second quarter of the current year, currency-neutral wholesale revenue grew by 17% and direct-to-consumer (DTC) revenue grew by 4%, on a comparable basis to the same period of the prior year (excluding the Yeezy impact, the company’s DTC business grew by 21%).

In this period, adidas’ sales in Europe increased by 19% on a currency-neutral basis and in the Emerging Markets and Latin America by 25% and 33%, respectively, as compared to the second quarter of last year. In Greater China and Japan/South Korea, sales were up by 9% and 6% respectively. In North America, the impact of the Yeezy business led to an 8% decline in sales, otherwise, sales would have grown, the company said.   

In the second quarter of the year, the company’s gross margin declined to 50.8% from 50.9% in the same period a year ago, due to the negative impact of “the significantly smaller Yeezy business”, excluding which the gross margin would have been around 50.5% despite negative currency effects.

The sportswear company’s operating profit almost doubled to 346 million euros from 176 million euros in the second quarter of 2023, representing an operating margin of 5.9%. The sale of some of the remaining Yeezy inventory contributed around 50 million euros to the second quarter operating profit. In this period, adidas’ net income from continuing operations increased significantly to 211 million euros from 96 million euros in the same prior year period, while basic earnings per share from continuing operations increased to 1.09 euros from 0.48 euros.

Full Year Outlook

“Given the improved business in Q2, we continue to raise our expectations and are now guiding for a full-year revenue increase in the high single digits and an operating profit of around 1.0 billion euros”, announced Bjørn Gulden. On the 16th of July, adidas had already raised its full year guidance to mid- to high-single-digit currency-neutral sales growth and an operating profit of around 700 million euros.