Adidas has reported its financial performance in the first nine months of 2024, showing a 10% increase in currency-neutral revenue, reaching €17.72 billion, compared to the same period in 2023.
This growth was driven by the company’s core business segments, which continue to perform exceptionally well. However, unfavorable currency fluctuations partially offset the revenue gains when compared to last year.
Adidas achieved a notable improvement in its gross margin, rising to 51.1% from 48.4% over the same months in 2023.
This enhancement was largely due to reduced freight and product costs, a favorable mix of business, and less discounting across key markets.
The company’s operating profit more than doubled, hitting €1.28 billion, thanks in part to the sale of remaining Yeezy stock, which added €150 million to its profits.
Net income from continuing operations increased to €851 million, underscoring the company’s ongoing profitability.
Despite increased investments in marketing and point-of-sale activities, operating expenses saw a modest 6% rise year-over-year, totaling €2.09 billion.
Impressively, operating expenses as a percentage of total sales decreased slightly, indicating effective expense management amidst growth initiatives.
Strong cash flow enabled Adidas to reduce its adjusted net borrowings by €1 billion, bringing total debt down to €4.21 billion as of September 2024.
Adidas has made substantial strides in inventory management, cutting down its inventories by 7% year-over-year to €4.52 billion.
This strategic move supports future revenue growth and enhances operational efficiency. Additionally, the company’s operating working capital decreased by 12% to €4.89 billion, driven by higher payables and disciplined management of inventory.
Looking forward, Adidas has raised its full-year guidance for 2024, now expecting currency-neutral revenues to grow by approximately 10%, an upgrade from the previous forecast of high single-digit growth.
The company projects operating profit to reach €1.2 billion by year-end, improving upon its earlier estimates of €1.0 billion.
