Adidas Shares Rise on Lifted Guidance, Yeezy Sales

By Michael Susin and David Sachs

Adidas shares rose after the group upgraded its annual targets following better-than-anticipated first-quarter sales and the further release of its Yeezy products.

Shares at 0805 GMT were up 6.4% at EUR215.50. Shares are up 33% over the last 12 months and 17% higher since the start of the year.

The German shoe and sports apparel company said late Tuesday that it now expects operating profit for 2024 of 700 million euros ($743.3 million), compared with its previous forecast of EUR500 million and EUR268 million reported in 2023.

Revenue, adjusted for currency effects, is expected to grow at a percentage rate in the mid-to-high single-digits, compared with previous expectations of mid-single-digit growth.

The upgrade follows a first-quarter revenue increase of 4% on year to EUR5.46 billion. Its gross margin improved to 51% from 45% a year prior, while operating profit jumped to EUR336 million from EUR60 million.

The company added that the latest release of Yeezy products in the first quarter generated revenue of around EUR150 million and an operating profit of around EUR50 million. This performance is expected to result in additional sales of around EUR200 million during the remainder of the year, they say. The company previously expected annual Yeezy sales of EUR250 million.

Jefferies analysts consider the guidance upgrade as largely expected, given that the company's target was considered cautious and needed to be refreshed. However, the welcome news for shareholders is the confirmation of Yeezy's strong resonance, they say.

"The lifting of the 2024 guidance bar to EUR700 million leaves plenty of scope in the upcoming months... What is more critical for upside from current peaks is the conviction of compounding market share gains," the analysts add.

Write to Michael Susin at michael.susin@wsj.com

(END) Dow Jones Newswires

April 17, 2024 04:27 ET (08:27 GMT)

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