Adidas, the sports apparel brand, reported a net income of €171 million ($182 million) from continuing operations in the first quarter (Q1) of fiscal year 2024 (FY24), marking a significant turnaround from the €24 million net loss reported in Q1 FY23.
In Q1 FY24, the company’s basic earnings per share from continuing operations amounted to €0.96, a notable contrast to the loss per share of €0.18 reported in Q1 FY23.
During the year, Adidas experienced an 8% growth in currency-neutral revenues, with a 5% increase attributed to the core Adidas business.
Revenues from the footwear segment surged by 13%, while those from the apparel segment increased by 2% during the first quarter.
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Overall, the company’s direct-to-consumer (DTC) business emerged as a significant growth catalyst, experiencing a 20% increase in currency-neutral terms.
Sales in Adidas’ retail stores increased by 11%, whereas e-commerce revenues surged by 34% throughout the quarter.
Regionally, Europe led the way with a 14% surge in currency-neutral sales, driven by robust performances in both direct-to-consumer (DTC) and wholesale channels.
Although revenues in North America saw a 4% decline, there was a notable increase in emerging markets and Latin America, with rises of 17% and 18%, respectively.
Adidas achieved an operating profit of €336 million for Q1 FY24, representing a significant increase from €60 million in the corresponding quarter of the prior year.
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Adidas CEO Bjørn Gulden expressed his satisfaction, stating, “I am pleased to see that our performance in Q1 exceeded our expectations. Sales, gross margin, and operating profit all outperformed our initial projections. We observed robust full-price sales in our direct-to-consumer channels, and our retail partners experienced higher sell-out than sell-in. This resulted in reduced inventories, fewer discounts, and improved gross margins for both our retail partners and ourselves.”
The company has updated its outlook for the full year of 2024, now anticipating currency-neutral revenue growth at a mid-to-high single-digit rate, along with an expected operating profit of €700 million.