Adidas AG Reports Significant Fourth Quarter Revenue Growth
Adidas AG (ADDYY) has announced impressive growth in its fourth-quarter results, showcasing a remarkable increase of 19% in currency-neutral revenues.
Revenue Surge in Euro Terms
In euro terms, the renowned sportswear and sneaker brand achieved a staggering 24% revenue rise, amounting to 5.97 billion euros (approximately $6.38 billion). This figure is a significant increase from the previous year's 4.81 billion euros in the same quarter.
Key Contributing Factors to Revenue Growth
The surge in revenue has been attributed to robust performance in both footwear and apparel categories, bolstered by the liquidation of Yeezy inventory, contributing an additional €50 million to the total revenue.
Footwear Sales Results
Adidas experienced a remarkable 26% increase in footwear sales, driven by a heightened demand for high-performance products in categories like Originals, Football, and Basketball models.
Apparel Categories Perform Well
In the apparel segment, sales saw an upward trend with an 11% increase. The growth spanned various sports and lifestyle categories, particularly in Football and Running.
Global Market Performance
The company reported successful sales across all global markets. Noteworthy double-digit growth was recorded in North America, with a 15% increase; Greater China saw a 16% rise, while Emerging Markets led with an impressive 21% growth.
Wholesale and Direct-to-Consumer Performance
The wholesale segment thrived with a 25% increase, and direct-to-consumer (DTC) sales also rose by 15%. E-commerce revenues recorded a 10% increase, reflecting Adidas's commitment to investing in its digital platforms.
Improving Profit Margins
Notably, Adidas achieved a gross margin of 49.8% in the fourth quarter, marking a 5.2% improvement compared to the previous year. This increase is attributed to lower product and freight costs, effective management of discounting, and a favorable product mix.
Positive Operating Profit
The operating profit for the quarter was reported at €57 million, presenting a remarkable recovery from a loss of €377 million recorded the previous year.
Dividend Announcement
Adidas has also announced its intention to approve a dividend of 2 euros per share for its shareholders, scheduled for May 15.
Outlook for 2025
Looking forward, Adidas aims for a high-single-digit increase in currency-neutral sales for 2025, with strong double-digit growth expected in key markets such as North America and Greater China. Additionally, the company projects an operating profit increase between 1.7 billion euros and 1.8 billion euros.
Yeezy Revenue Outlook
Importantly, Adidas has stated that it does not anticipate any revenue contributions from Yeezy products in 2025, following the completion of their inventory sale in 2024.
Recent Price Action
In terms of stock performance, ADDYY shares closed at $127.63, reflecting a decrease of 1.39% on the trading day.
Frequently Asked Questions
What contributed to Adidas's revenue growth in Q4?
The growth in Q4 was largely driven by increased sales in both footwear and apparel, alongside revenue from Yeezy inventory sales.
How did the Adidas footwear segment perform?
The footwear segment experienced a 26% increase in sales, led by high-performance products across various lines.
What is the expected outlook for Adidas in 2025?
Adidas expects high-single-digit sales growth, particularly in markets like North America and Greater China, with an increase in operating profit.
When will the dividend for shareholders be approved?
The dividend of 2 euros per share is set for approval on May 15.
What is the current status of Yeezy product sales?
Adidas has completed the sale of Yeezy inventory and does not expect any revenue contributions from Yeezy products in the coming year.
