adidas expects unfavourable currency to impact profitability in 2024. Credit: Robert Way/Shutterstock.

Athletic apparel and footwear brand adidas has reported that its revenue increased by 11% in currency-neutral terms in the second quarter (Q2) of the fiscal year 2024 (FY24) compared to the same period of FY23.  

The company’s revenue climbed by 9% to €5.82bn ($6.34bn) from €5.34bn in the same period of the previous year. 

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Excluding the impact of Yeezy sales, the brand’s currency-neutral revenue saw a 16% rise during the quarter.  

In the latest quarter, adidas’ operating profit stood at €346m against €176m in Q2 FY23. 

This increase in operating profit includes €50m from the sale of parts of the remaining Yeezy inventory.  

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The company’s gross margin was 50.8% in Q2 2024, compared to 50.9% in the same quarter of the previous year.  

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The underlying gross margin for adidas improved significantly, buoyed by better product sell-throughs, reduced discounting, lower sourcing costs and a favourable mix of product categories. 

In response, the company has revised its full-year outlook upwards.  

It now anticipates currency-neutral revenues to rise at a high-single-digit rate in 2024, an upgrade from the previous forecast of a mid-to-high-single-digit rate increase.  

The German sportswear giant also expects its operating profit to reach around €1bn, up from the earlier estimate of €700m. 

This revised forecast includes the assumption that the remaining Yeezy inventory will be sold at cost, contributing an additional €150m in sales without further profit for the remainder of the year.  

adidas expects unfavourable currency to continue impacting profitability throughout 2024, particularly in terms of reported revenues and gross margin development, as was the case during the first half of the year. 

In June 2024, the company announced an investigation into potential misconduct in its Chinese operations after receiving a whistleblower complaint alleging large-scale bribery by senior staff.