German sportswear giant Adidas saw revenue surge 11 percent to 5.82 billion euros in the second fiscal quarter as the company raised its guidance for full-year sales.
The 11 percent gain was at constant exchange rates. At reported rates, second quarter revenue was up 9 percent. Sales at the Adidas brand were up 16 percent in the three-month period.
Earlier in July, the company had already raised its full-year guidance based on second quarter expectations. On Wednesday, it raised the number yet again, with revenue set to increase at a “high single-digit rate” for the full-year.
In the first half, the company notched sales of 11.28 billion euros, a 10 percent increase at constant exchange rates, year-on-year.
Adidas chief executive officer Bjørn Gulden said the second quarter performance “confirms that we are improving, and on the way to becoming a good, healthy company. The improved brand momentum with our consumer happened faster than we had expected.”
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The second quarter results were driven by sales in Adidas’ home market of Europe, where revenues rose 19.4 percent, at constant exchange rates, to 1.91 billion euros.
Adidas also saw growth in Greater China, Japan and South Korea. In China, Adidas revenues grew by 9.3 percent to 822 million euros, and in Japan and South Korea they were up 5.8 percent to 321 million euros at constant exchange.
Sales in Emerging Markets increased by 24.6 percent in the quarter to 749 million euros.
In North America, sales sank 7.7 percent to 1.3 billion euros at constant exchange. “The decline was solely related to the significantly smaller Yeezy business,” the company said, referring to the fashion brand founded by Ye, formerly known as Kanye West.
The company added that, excluding Yeezy sales, revenues in the territory had actually increased, although it did not specify by how much.
Adidas ended a highly profitable relationship with West in 2022. The end of the collaboration and the Yeezy line has dragged on Adidas’ accounts but the traumatic chapter appears to be coming to a close. So far this year, remaining Yeezy stock brought in 350 million euros, the German company said.
It expects to sell another 150 million euros worth of Yeezy inventory during the remainder of 2024.
In terms of product lines, Adidas footwear sales rose 17 percent and apparel increased by 6 percent, on a currency neutral basis.
Apparel sales were “driven by strong double-digit growth in football,” according to the company, which added that replica jersey sales related to major soccer tournament in Europe and Latin America were responsible for the growth. Adidas accessories sales fell 8 percent in the quarter.
The company increased EBITDA, earnings before interest taxes, depreciation and amortization, by 48 percent to 1.18 billion euros during the first half of 2024.
“In the first half of 2024, the global sporting goods industry has proven to be resilient despite several challenges,” the company said in its half-year financial report.
“Moderated yet persistent inflation, high interest rates, and the corresponding pressure on discretionary spending continued to be a theme. However, consumer demand was resilient,” it added.
Major sporting events such as the UEFA and Copa América football tournaments and the Olympics also helped the wider industry, Adidas added.
