Result more than fivefold
Adidas raises forecast after a strong start to the year
April 16, 2024, 6:56 p.m
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Adidas earned more than expected in day-to-day business at the beginning of the year. Once again, selling off Yeezy stocks is worth it. The sporting goods manufacturer’s confidence is growing with the European Football Championships and the Olympics – and so earnings are likely to be higher than previously expected.
The sporting goods manufacturer Adidas is raising its forecast after a strong profit increase at the start of the year. For the full year, the Nike rival now expects an operating result of around 700 million euros, which is 200 million euros more than previously forecast. Sales are expected to increase by a mid to high single-digit percentage after adjusting for currency effects. Adidas had previously expected a mid-single-digit increase. However, unfavorable currency effects are likely to continue to put pressure on the profit margin, Adidas said.
According to the information, revenue in the first quarter increased by eight percent over the year to almost 5.5 billion euros. The operating result improved to 336 million euros from 60 million a year ago. The sale of the “Yeezy” inventory from the discontinued collaboration with the controversial rapper Kanye West (“Ye”) alone brought in proceeds of around 150 million euros.
The sporting goods industry is hoping for a boost this year from the European Football Championship and the Olympic Games in Paris. Last year, the reduction in inventories, which had swelled to 5.9 billion euros, put pressure on margins.
The sporting goods industry is suffering from the fact that it ordered too many goods during the Corona crisis for fear of delivery problems. However, due to the weak economy, customers did not take up the purchase as expected. In addition, Adidas separated from Kanye West, whose anti-Semitic comments had become intolerable. He had brought Adidas billions in sales and profits for years with his “Yeezy” sneakers.