Adidas stock price soared more than 7% on Wednesday, reaching a two-year high, after the sportswear manufacturer announced impressive quarterly results and upgraded its 2024 financial forecast.
The spike in shares came as the German company revealed it had exceeded analysts' expectations in its recent earnings report on Tuesday.
Adidas cited robust sales momentum in its retro "terrace" footwear lines, including popular models like the Samba, Gazelle, and Campus, as key growth drivers.
This resurgence in retro styles, along with gains in performance sportswear, contributed significantly to the positive results.
Wedbush analysts have noted that these segments are seeing particularly strong demand, which has helped bolster Adidas's market position.
Meanwhile, Stifel's Cedric Lecasble emphasized that the improved 2024 guidance was largely attributable to effective brand marketing strategies rather than previous collaborations, such as the discontinued Yeezy line with rapper Ye.
Following a split with Ye in October 2022, which involved halting sales of the lucrative Yeezy sneaker range, Adidas has made strategic moves under CEO Bjorn Gulden to rejuvenate its brand.
This includes clearing out the remaining Yeezy stock and pushing its classic designs.
Despite these efforts, Lecasble described the revenue achievements in the first quarter as "impressive" amidst challenging market conditions.
However, some analysts, like RBC's Piral Dadhania, believe that Adidas's operating profit forecast of 700 million euros for 2024 is still too cautious, especially given that market consensus estimates are closer to 890 million euros.
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