(Reuters) – Adidas climbs on the stock market on Wednesday, the action having reached a two-year high, after the German sports equipment manufacturer reported results above expectations on Tuesday, driven by the dynamics of its sales, and raised its outlook for 2024.
On the Frankfurt Stock Exchange, around 10:50 GMT, the stock rose 7.65% to 218 euros, among the best performances on the European Stoxx 600 index, which gained 0.6% at the same time.
Wedbush analysts point out that Adidas’s sales growth was driven by strong demand for its historic Samba, Gazelle and campus models, associated with the world of football supporters, as well as by the solidity of sales of its sports performance products.
The increase in the outlook for 2024 “did not have much to do with the Yeezy mechanics, but was much more motivated by the construction of the Adidas brand which is materializing at full speed”, according to Cedric Lecasble, analyst at Stifel, who described the turnover performance as “impressive” in a difficult context.
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Since last year, under the leadership of Bjorn Gulden, the new general manager, Adidas has been trying to turn around after its breakup with Kanye West, the unsold Yeezy sneakers of the American rapper having impacted the group to the tune of 1.2 billion euros.
Analysts, however, consider that forecasts of an annual operating profit (Ebit) of 700 million euros are still conservative. Adidas reported on Tuesday an Ebit of 336 million euros in the first quarter, after 60 million euros a year ago.
“The market clearly does not believe the Ebit guidance, which seems unrealistic and too conservative to us,” underlines Piral Dadhania, analyst at RBC.
Adidas also said it sold 150 million euros of Yeezy products during the last quarter, for a contribution of around 50 million euros to operating income.
The group, however, said it did not expect the sale of the remaining stock, valued at around 200 million euros, to make an additional contribution to profit.
(Report by Linda Pasquini, French version by Augustin Turpin)
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