5 March 2025
If you are covering Adidas’ latest financial results, please find below a comment from Mamta Valechha, consumer discretionary analyst at Quilter Cheviot:
“Adidas pre-released their Q4 numbers in Jan where we were told sales grew 19% (18% excluding Yeezy), and despite being a very promotional period for many peers, Adidas managed to deliver very strong gross margin expansion. Today we got a bit more granular detail on the drivers of performance.
“Footwear sales were up 26%, with adidas firing on all cylinders – lifestyle, training, football and running also accelerated in response to revamped product ranges. Apparel also saw growth across all categories, up 11%.
“Across regions, North America and China returned to double digit growth, reflecting improvements in the wholesale channel as well as company owned retail stores. Elsewhere, in Europe, Adidas delivered impressive growth of 25%.
“However, the focus of today will fall on the 2025 guide, where Adidas is guiding towards high-single digit revenue growth, with the Adidas brand specifically growing in the double digits. For context, 2024 saw it achieve 12% revenue growth. The big disappoint though is the operating profit guide of € 1.7 billion and € 1.8 billion, respectively. This implies a 7% margin, and falls well short of the €2bn expected by consensus.
“There has been a lot of investor discussion ahead of today’s results about how conservative Adidas’ guidance could be, as was the case in 2024. But nevertheless, initial reactions will be one of disappointment, although consensus had ticked up in January.
“That said, we think management’s confidence is high given a strong Q4 across the board and strong brand momentum, so we believe consensus forecasts are achievable.”
