Adidas Raises 2024 Earnings Forecast After Positive Q2 Results | kbnmart

German sportswear maker Adidas said on Tuesday it would raise its full-year profit outlook after better-than-expected second-quarter results, its second update this year.

The success of its low-top, multi-colored Samba and Gazelle sneakers, coupled with weak sales at rival Nike, were expected to help Adidas post strong sales in the second quarter.

Adidas said 2024 net operating profit is now expected to be around 1 billion euros ($1.1 billion), up from previous guidance of around 700 million euros and double its forecast earlier this year.

CEO Björn Gulden, who has been in charge since the start of 2023, has been leading a turnaround at a company that was hit hard by its split with rapper Ye, formerly known as Kanye West, which left Adidas with €1.2 billion worth of unsold Yeezy shoes.

The profit increase comes after Adidas said its second-quarter sales rose 9% compared to the previous year to 5.82 billion euros.

That was above analysts’ average forecast of €5.58 billion, according to London Stock Exchange data.

Adidas said its gross margin was 50.8% in the quarter, down from 50.9% a year ago and analysts’ expectations of 51.4%, as Yeezy’s business fell below 2023 levels.

Adidas and rivals Puma and Nike are betting on increased demand for products like running shoes this summer, with the Olympic Games starting in Paris later this month. The companies also sponsor Olympic athletes and national teams.