An Adidas flagship store at Nanjing Road Pedestrian Street in Shanghai, China.
Cfoto | Future Publishing | Getty Images
Adidas on Wednesday reported an uptick in fourth-quarter sales that exceeded expectations, as the retailer sold off the last of its remaining Yeezy stock, but pointed to slower revenue growth in the year ahead.
The German sportswear giant recorded a 19% increase revenues at neutral currency rates to 5.97 billion euros ($6.34 billion) in the three-month period, ahead of the 5.72 billion euros forecast by LSEG analysts.
Operating profit came in at 57 million euros in the fourth quarter compared to a loss of 377 million euros in the same period of last year.
Shares were down 2.6% shortly after the market open on Wednesday.
Full year sales rose 12% at currency neutral rates to 23.7 billion euros, versus an anticipated 23.5 billion euros. Operating profit totaled 1.34 billion euros in 2024, compared with the 1.27 billion euros forecast.
The figures came in ahead of with the company’s own guidance, raised in October, for full-year revenue growth of around 10% at currency-neutral rates and operating profit of around 1.2 billion euros.
CEO Bjorn Gulden described the Wednesday results as “much better than we had expected.”
“Although we are not yet where we want to be long term, it was a very successful year that confirmed the strength of the adidas brand, the potential of our company and what a fantastic job our teams are doing. We still have a lot to improve but I am very proud of what our people achieved in 2024,” he said in a statement.
Outlining its forecasts for 2025, the company said its expects currency neutral sales to rise at high-single-digit rate and operating profit to increase to between 1.7 billion euros and 1.8 billion euros.
“For 2025 we are in very good shape,” Gulden said. “Of course there is a lot of macroeconomic uncertainty right now, but with products that we think are on trend and the attitude of being agile and more local, I cannot see why we should not be successful.”
Adidas is attempting to grow its market share in North America amid declining sales at Nike and a broader retailer shift away from an overdependence on a weaker China.
Adidas’ North America sales fell 1.6% at currency-neutral rates in 2024, having struggled to recover from the termination of its once-lucrative Yeezy sneaker line. The sportswear giant was forced to axe the Yeezy line after terminating its partnership with Ye, the rapper formerly known as Kanye West, over a string of anti-Semitic remarks that the rapper made in 2022.
The company on Wednesday said that it had sold the remainder of its Yeezy inventory in the fourth quarter.
Gulden has been looking to distance Adidas from its loss-making Yeezy line and spark a wider turnaround of the brand since taking the helm in January 2023.
Yanmei Tang, analyst at Third Bridge, highlighted the phaseout of the Yeezy brand and the absence of significant sporting events as headwinds for the year ahead. She also noted that pointed to the need for further innovation beyond its popular Samba and Gazelle sneakers to drive its growth targets.
“While Adidas has managed to regain traction in lifestyle footwear, particularly with its Terrace line (Samba, Gazelle, and Spezial), the peak of this trend may have already passed in key markets like Europe,” Tang wrote in a note Tuesday.
“The brand is now shifting focus toward newer silhouettes such as the SL 72 and the potential resurgence of the Superstar, but these are unlikely to fully compensate for the expected slowdown in the Terrace trend,” she said.
Adidas has been gaining ground against major rival Nike over recent quarters, with the former’s market share rising to 8.9% in 2024 versus the latter’s 14.1%, according to Globaldata cited by Reuters. However, the emergence of newer brands including On, Hoka and New Balance has brought increased competition to the global sportswear market, with each clawing share over the past year.