Adidas experienced a surge in its shares following the announcement of an increase in its full-year 2024 earnings guidance. The company has raised its expected operating profit to approximately 1 billion euros, up from the initial estimate of 700 million euros. This upward revision in earnings guidance has instilled confidence in investors, leading to a notable increase in the stock price.
Adidas reported better-than-expected preliminary results for the second quarter, with a significant rise in revenues. The company recorded an 11% increase in revenues compared to the previous year. Excluding sales of the Yeezy line, revenues rose by 16% in the quarter. This robust performance in the second quarter has contributed to the positive outlook for Adidas’s future earnings.
In a strategic move, Adidas decided not to write off most of its unsold Yeezy inventory but instead opted to sell the remaining shoes. The collaboration with rapper Ye (formerly known as Kanye West) on the Yeezy line came to an end due to a series of controversial remarks made by the artist. The decision to sell the remaining Yeezy inventory is expected to generate additional sales of approximately 150 million euros by the end of the year.
Adidas reported a significant increase in its operating profit for the second quarter, reaching 346 million euros. This figure is substantially higher than the 176 million euros recorded in the same period the previous year. The company’s strong financial performance has been driven by effective cost management and successful marketing strategies.
Investors have responded positively to Adidas’s improved earnings guidance and strong second-quarter results. The stock price surged by 4.42% in early trading following the announcement. The market’s favorable reaction reflects confidence in Adidas’s ability to deliver sustained growth and profitability in the future.
Adidas’s recent performance demonstrates the company’s resilience and strategic decision-making. By exceeding market expectations and raising its earnings guidance, Adidas has positioned itself as a leader in the sportswear industry. The decision to sell the remaining Yeezy inventory and the impressive growth in operating profit further enhance Adidas’s financial outlook. Investors can look forward to continued success from Adidas as it continues to capitalize on its strong brand and market presence.