Adidas Raises Full-Year Guidance on Brand Momentum, Third-Quarter Results -- Update

Dow Jones10-16

By Adria Calatayud

Adidas raised its full-year guidance for the third time in as many quarters, as the company seeks to push ahead with a revamp that has boosted its sales at a challenging time for rival Nike.

The German sportswear company cited better-than-expected results for the third quarter and brand momentum as the reasons behind its higher expectations for sales and profit in 2024.

The company has been trying to turn around its fortunes since Bjorn Gulden became chief executive at the start of 2023. In recent quarters, Adidas benefited from a firm pace in sneaker sales that lifted earnings.

Adidas said Tuesday that it now expects operating profit for 2024 to be at around 1.2 billion euros ($1.31 billion), up from its previous forecast of 1 billion euros.

The company projects revenue to grow by around 10% at constant currency, against previous expectations of an increase in the high single percentage digit range.

Adidas's guidance increase came just weeks after Nike declined to provide a forecast for the fiscal year ending in May and posted a drop in sales.

For the third quarter, Adidas reported an operating profit of 598 million euros, up from 409 million euros in the same prior-year period, on revenue that grew 7%, to 6.44 billion euros.

Analysts expected an operating profit of 592.1 million euros on sales of 6.43 billion euros, according to consensus estimates provided by Visible Alpha.

Quarterly sales rose 10% at constant currency, and jumped 14% when excluding sales of products from its now defunct Yeezy collaboration with musician Kanye West, who now goes by Ye. Sales of remaining Yeezy products resulted in a contribution to profit of around 50 million euros, the company said.

Adidas said its new guidance assumes the remainder of Yeezy inventory during the rest of the year would be sold on average at cost, resulting in about 50 million euros in extra sales and no contribution to profit.

Write to Adria Calatayud at adria.calatayud@wsj.com

(END) Dow Jones Newswires

October 15, 2024 13:17 ET (17:17 GMT)

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Adidas Raises Full-Year Guidance on Brand Momentum, Third-Quarter Results -- Update

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