Adidas disclosed a revenue increase to €6.15bn ($6.99bn) in the first quarter of fiscal 2025 (Q1 FY25), marking a 13% rise on a currency-neutral basis compared to the previous year. This surge is attributed to a 17% growth of the Adidas brand.
The financials for this period do not reflect any earnings from Yeezy merchandise following the disposal of the remaining stock last year, the company noted.
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Adidas CEO Bjørn Gulden said: “I am very proud of what our team achieved in Q1. Double-digit growth across all markets and channels in today’s volatile environment shows the strength of our brand and underlines the great job our people are doing.
“In a ‘normal world’ with this strong quarter, the strong order book and in general a very positive attitude towards Adidas, we would have increased our outlook for the full year both for revenues and operating profit. The uncertainty regarding the US tariffs has currently put a stop to this.”
Adidas’ key Q1 FY25 results
Apparel sales rose by 8%, predominantly due to strong performances in originals, sportswear, and outdoor, while accessory sales climbed by 10%.
Footwear segment spearheaded growth with a 17% hike in currency-neutral terms, fuelled by significant gains across various categories including originals, sportswear, running, training, specialist sports, and performance basketball.
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By GlobalDataAdidas’ wholesale revenues soared by 18% on a currency-neutral basis due to impressive sell-through rates and expanded shelf space allocations.
During the quarter, own retail sales grew by 13%, propelled by significant comparable store growth across Adidas’ retail network. A slight decline of 3% in ecommerce revenues was solely linked to the discontinuation of Yeezy-related business.
However, excluding this factor, ecommerce saw an 18% increase contributing to a direct-to-customer (DTC) growth of 15%.
Regionally, Adidas maintained strong double-digit growth rates with 26% in Latin America and 23% in Emerging Markets (23%). In Europe, the company’s sales grew 14% in Europe, 13% in Greater China and 13% in Japan/South Korea.
North American revenues were up by 3%, but were affected by the Yeezy phase-out.
Gross margin improved by 0.9 percentage points to 52.1%, primarily due to reduced costs for products and freight alongside decreased discounting activities.
Operating profit surged by 82% to €610m in the quarter under review, resulting in an operating margin enhancement of 3.8 percentage points to reach 9.9%.
Net income from continuing operations was €436m in Q1 FY25, increasing more than double from €171m in the same period a year ago. Diluted earnings per share (EPS) from continuing operations also increased to €2.44 from €0.96.
Adidas’ full year outlook
Despite heightened external volatility and macroeconomic uncertainties since issuing its full-year outlook in early March, Adidas reaffirmed its forecast but acknowledged a broader range of potential outcomes. These include both positive prospects from better-than-expected Q1 results to risks associated with potential higher US tariffs.
The company anticipates further market share gains and projects high-single-digit rate growth in currency-neutral sales for 2025 driven by continued double-digit expansion of the Adidas brand.
Adidas has maintained its previous forecast of operating profit between €1.7bn and €1.8bn for the fiscal.
“Cost increases due to higher tariffs will eventually cause price increases, not only in our sector, but it is currently impossible to quantify these or to conclude what impact this could have on the consumer demand for our products. We currently see a positive development in all other markets and will of course try to compensate for the uncertainty in the US by delivering even better results in the rest of the world. We therefore stick to our original outlook but admit that there are uncertainties that could put negative pressure on this later in the year,” Bjørn Gulden added.
