Adidas Earnings: Results and 2024 Outlook Match Preliminary Results; Shares Expensive

Narrow-moat Adidas’ 2023 fourth-quarter results and initial 2024 outlook were mostly unchanged from its preliminary results of Feb. 1 (see our note). The firm expects a challenging 2024 due to a suboptimal economy, unfavorable currency movement, and soft demand for sportswear, especially in North America. As we lowered our forecast after the announcement, we do not expect to make any material changes to our EUR 163/$88 per share fair value estimates; we think shares are overvalued. We think CEO Bjorn Gulden is making progress on product innovation, marketing, and other key initiatives, but we also think that financial performance is unlikely to improve materially until 2025.