Adidas Stock: Q1 Performance Exceeds Market Expectations

Adidas shares surged over 4% in early trading following the company's release of preliminary first-quarter 2024 results that significantly outperformed analyst projections. The sportswear giant reported revenue of approximately €6.15 billion, marking a substantial increase from the €5.46 billion recorded in the same period last year. This represents a currency-adjusted growth of 13%, but more impressively, the core Adidas brand achieved 17% currency-adjusted growth when excluding the previous year's Yeezy product sales, which concluded at the end of 2023. The strong performance was driven by double-digit growth across all global markets and distribution channels, demonstrating robust brand momentum despite challenging market conditions including geopolitical tensions and consumer spending concerns in certain regions.

Profitability Soars on Improved Margins

The operating profit nearly doubled year-over-year, jumping from €336 million to €610 million in Q1. This remarkable improvement was supported by enhanced profitability metrics, with the gross margin increasing from 51.2% to 52.1%, and the core Adidas brand achieving a margin improvement of 1.6 percentage points. The operating margin also showed significant progress, climbing from 6.2% to 9.9%. Investors are now eagerly anticipating the final quarterly results scheduled for release on April 29, 2024, when the Herzogenaurach-based company will provide additional details during a conference call with analysts.

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Source StockWorld