13 March 2024
If you are covering Adidas’ latest results, please see the following comment from Mamta Valeccha, equity research analyst at Quilter Cheviot:
"Adidas had already pre-released headline numbers at the end of January but what is interesting to note today is the clear acceleration of the Adidas brand. Although Q4 saw sales decline by low single digits, the group is guiding for single digit growth for 2024, for the underlying business, excluding any sales of Yeezy. Furthermore sales are expected to accelerate throughout the year, and grow at a significant rate in the second half of the year.
"There was also a slight upgrade for Q1, with management now expecting some growth versus the flat predictions previously.
"For Adidas and the sportswear industry in general, performance will be back half weighted, with the first half still being impacted by initiatives to bring down elevated inventories, particularly in North America. As a result, order books by retailers are still weak for the first half of the year as they are being quite cautious. However, demand is expected to pick-up from on the back of the Olympics and Euros this summer.
"Adidas plans to return to top-line growth by scaling its successful franchises such as the Sambas and Gazelles, but also introducing new ones, and leveraging more of its product range. This will also include a drive to improve retailer relationship and create more impactful marketing initiatives. By region, all are guided to see positive sales growth, but North America, as the group makes effort to reduce inventory into the wholesale market in the first half."
