Following today’s release of Adidas’ figures for the six months ending 30 June 2024 Alice Price, associate apparel analyst at GlobalData, a leading data and analytics company, offers her view: “Adidas continued its upward growth trajectory in H1 FY2024, remaining firmly on a path to recovery, with reported revenue rising a robust 6.2% to €11.3bn. This was predominantly driven by its performance in the second quarter, when sales increased 8.9%, despite unfavourable currency impacts, with currency-neutral sales growing even more strongly at 11%. While this growth is off the back of weak comparatives, Adidas’ turnaround is also due to the astronomical success of its lifestyle footwear, helping to restore perceptions of the brand and propel it back to relevance. The sale of its remaining Yeezy stock is still propping up its topline as well, contributing €350m to Adidas’ revenue across the period, as well as buoying its operating profit by $100m, allowing it to grow by 118.8% overall to reach €682m.
“This positive performance has instilled confidence in the group, leading it to increase its full-year outlook for a consecutive time this year. Adidas now anticipates currency-neutral revenue will increase at a high-single-digit rate in FY2024, up from previous expectations of a mid-to-high-single-digit rate increase. Its operating profit is also now expected to reach €1bn versus its previous prediction of €700m, as it remains assured that its brand momentum will continue to grow.
“Adidas’ footwear segment continues to outperform, with currency-neutral revenue rising 17% in Q2, accelerated by the popularity of its Originals proposition, alongside its football lines, with both reporting strong double-digit growth. Its football footwear no doubt benefited from the recent UEFA Euro and CONMEBOL Copa America tournaments, helping drive visibility and momentum for the latest iterations of its Predator and Copa styles, as well as the newly launched F50 franchise. After suffering over the past couple of years, Adidas’ apparel proposition witnessed a notable uplift during the quarter of 6%, predominantly driven by jersey sales relating to the aforementioned tournaments. However, accessories continues to disappoint, with revenue declining 8%.
“Latin America experienced stellar demand, with currency-neutral revenue rising 32.6% in Q2, as its growing economy drives heightened appetite for apparel. Demand in Europe also remained robust, with sales rising 19.4%, with the popularity of Adidas’ lifestyle footwear elevating its fashion credentials among shoppers in the region. Revenue in Greater China grew 9.3%, while Japan and South Korea also witnessed a respectable uplift of 5.8%, as the group’s renewed brand momentum has enabled it to stand out against popular domestic players such as Anta and Li Ning. However, North America remains the black sheep, with sales declining 7.7%, as the loss of its Yeezy business continues to affect brand desirability in the region.”
