 "Adidas Q4 earnings increase after strong sneaker sales in holiday season")
Adidas AG reported better-than-expected results amid the sustained boom for retro sneakers like the Samba and more sales from its shrinking stockpile of Yeezy footwear.
The German sportswear company generated operating profit of €57 million ($59 million) in the fourth quarter, it said in a statement of preliminary results Tuesday. That drove full-year operating profit to €1.3 billion, higher than it forecast in October, based on unaudited figures.
Currency-neutral revenue reached €6 billion for the quarter, higher than the €5.3 billion average of analyst estimates. The company’s American depositary receipts surged as much as 5.6 per cent after the close of trading in Europe.
Chief Executive Officer Bjorn Gulden has been winning over investors with a back-to-basics focus on sports and developing new footwear and apparel. He’s hoping to close the gap with struggling industry leader Nike Inc.
Despite macroeconomic uncertainty, Adidas said it still aims to deliver double-digit sales growth and to increase operating profit. The company will publish its final results on March 5, along with financial guidance for 2025.
“We see potential to increase our market share in all markets,” Gulden said.
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The company had pledged to return to growth in 2024 after an underwhelming 2023, when the company suffered from the canceled Yeezy partnership with the rapper and designer Ye, formerly known as Kanye West.
Adidas is growing across all its regions and divisions, with more interest from consumers and retailers in both sports and lifestyle products, it said.
Demand for classic sneaker models, including the Samba, Spezial and Campus, has helped Adidas win back favor with retail store partners. In recent years, they had pushed newer labels including On Holding AG and Deckers Outdoor Corp.’s Hoka, while Adidas and Nike built out their own e-commerce channels.