Adidas continues to expect unfavourable currency effects to weigh significantly on its profitability in FY24. Credit: kit lau via Shutterstock.com.

Sports footwear and apparel brand Adidas has announced an 8% growth in currency-neutral revenues for the first quarter (Q1) of fiscal 2024 (FY24), exceeding the previous year’s figures. 

The company’s revenues in euro terms also saw an increase to €5.45bn ($5.79bn), up by 4% from €5.27bn in the same period in FY23.  

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This marks a significant improvement in financial performance for the sportswear giant. 

The gross margin for Adidas in Q1 FY24 was reported at 51.2%, a substantial increase of 6.4 percentage points from 44.8% in FY23.  

Its operating profit for the quarter reached €336m, a notable rise from the €60m recorded in the same period of the previous year. 

Following these strong results, Adidas has revised its full-year guidance upwards. 

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The company now anticipates currency-neutral revenues to grow at a mid-to-high-single-digit rate in 2024, an upgrade from the previously forecasted mid-single-digit rate.  

Operating profit expectation has also been updated, with the company now aiming for €700m, up from the earlier estimate of €500m. 

The recent Yeezy product release contributed significantly to the quarter’s success, generating revenues of €150m and an operating profit of €50m.  

Adidas plans to sell the remaining Yeezy inventory at cost, expecting additional sales of €200m without further profit contribution for the rest of 2024.

Despite the positive performance in the first quarter, Adidas continues to expect unfavourable currency effects to weigh significantly on its FY24 profitability.  

These effects are anticipated to negatively affect both reported revenues and gross margin development.

In its FY23 result, released in March 2024, Adidas reported a net loss from continuing operations of €58m for FY23 compared with a net income of €254m recorded in FY22.