Sports-inspired apparel brand adidas has announced a 10% increase in currency-neutral revenues for the first half (H1) of the fiscal year 2024 (FY24), compared to the same period of FY23.
In euro terms, the company’s revenues were €11.28bn ($12.20bn) in H1 FY24, up 6.2% compared to €10.61bn in H1 FY23.
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The company’s net income from continuing operations saw a significant rise of 426.2% to €382m, compared to €73m in H1 FY23.
During the half year ending 30 June 2024 (H1), adidas’ gross margin improved to 51.0%, a 3.2 percentage points increase from the previous year.
Despite a 3% rise in other operating expenses to €5.115bn, the company’s operating profit surged to €682m, resulting in an operating margin of 6.0%.
The sale of the remaining Yeezy inventory contributed approximately €100m to operating profit.
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By GlobalDataIn the second quarter (Q2) of the fiscal year, adidas’ currency-neutral revenues grew by 11%, driven by a 16% growth in the underlying business.
Revenue of its wholesale segment saw a 17% increase, while direct-to-consumer revenues grew by 4% over the quarter.
However, e-commerce revenues fell by 6% due to the smaller Yeezy business.
Regionally, Europe experienced a 19% increase in currency-neutral sales, while emerging markets and Latin America witnessed currency-neutral sales growth of 25% and 33% respectively.
Sales in Greater China and Japan/South Korea also saw growth, while North America faced an 8% decline.
adidas’ net income from continuing operations was €211m in Q2 FY24, up from €96m in Q2 FY23.
adidas CEO Bjørn Gulden said: “Q2 was another quarter confirming that we are improving and on the way to again becoming a good and healthy company. The consumers are reacting positively to both our marketing and to our product launches.
“We see improved sentiment for the adidas brand globally and we continue to see improved sell-out numbers, both for lifestyle and performance products. New in the quarter was to see a positive development also for apparel.”
Following the better-than-expected performance in the second quarter and current brand momentum, adidas raised its 2024 guidance on 16 July.
The company now anticipates currency-neutral revenues to increase at a high-single-digit rate, with operating profit expected to reach around €1bn.
adidas and fashion house Thom Browne resumed their legal battle over trademarks in the UK courts on 17 July 2024, as reported by Reuters.
