Adidas, the German Sporting Goods Manufacturer, Posts Surprise Profit in First Quarter, Confirming Preliminary Figures Driven by Strong Brand Momentum. The Company Recorded a Net Profit of 170 Million Euros for the Three Months to the End of March, Compared with a 39 Million Euro Loss in the Same Period Last Year. These Figures Exceeded Analysts' Expectations, Who Had Forecast a Profit of 163.66 Million Euros.

The improved gross margin, which increased by 6.4 percentage points to 51.2%, is particularly noteworthy. This reflects healthier inventory levels, fewer discounts, lower procurement costs, and a more favorable business mix.

Despite Growth in Europe, Emerging Markets, and Greater China, This Was Partly Offset by a Decline in North America, Where a More Cautious Sales Approach Was Pursued Due to Still High Inventory Levels. In Europe, Sales Adjusted for Currency Effects Increased by 14%, in Emerging Markets and Greater China by 17% and 8%, Respectively. Sales in North America Declined by 4%.

The company's inventory levels fell by 22% to 4.43 billion euros, reflecting the company's efforts to significantly reduce inventories.

Bjorn Gulden, CEO of Adidas, stated that growth is currently being driven primarily by the lifestyle business, especially by Originals footwear. "We are also seeing good results in the higher-priced segment of our running, football, and basketball products," Gulden added. He emphasized the continued strong and growing demand for footwear franchises such as Samba, Gazelle, Spezial, and Campus, with new franchises like SL72 becoming increasingly popular.

For the year 2024, Adidas confirmed its outlook, which it had already raised on April 16 following a successful start to the year. The company expects that the remaining Yeezy inventory will be sold over the course of the year at average costs, which is anticipated to generate revenues of about 200 million euros, but no additional profit contribution.