Investing.com -- Shares of Adidas jumped over 5% on Wednesday after the company reported strong preliminary fourth-quarter results, showcasing a 19% increase in currency-neutral revenue, surpassing expectations.
In euro terms, revenue soared 24% to €5.965 billion, compared to €4.812 billion in the same period in 2023.
Excluding Yeezy sales, Adidas still delivered an impressive 18% revenue growth. The company also reported significant improvements in profitability, with its gross margin rising by 5.2 percentage points to 49.8% and an operating profit of €57 million, a turnaround from the €377 million loss recorded in Q4 2023.
For the full year 2024, Adidas achieved a 12% increase in currency-neutral revenue, with total revenue reaching €23.683 billion, an 11% rise in euro terms compared to €21.427 billion in 2023.
Excluding Yeezy sales, currency-neutral revenues were up 13%. The company's gross margin for the year improved by 3.3 percentage points to 50.8%, while operating profit surged by over €1 billion, hitting €1.337 billion, a substantial improvement from €268 million in 2023.
"We presume lifestyle mix accretion remains strong, but we will have to wait for the 5 March finals for more details. We assume neither Yeezy nor IAS 29 have had a meaningful impact on the Q4 profit outcome," said analysts at Jefferies in a note.
Adidas (OTC:ADDYY) CEO Bjørn Gulden expressed satisfaction with the results, stating, "19% currency-neutral growth (+24% reported) in a quarter that in general was difficult for the trade underlines the strong momentum we currently see for our brand and our products."
He highlighted the robust interest from consumers and retailers across all regions and divisions.
Looking ahead, Gulden noted that while there is macroeconomic uncertainty, Adidas aims to continue growing at a double-digit rate and further improve operating profit, targeting a 10% margin.
The company will release its full financial results for 2024 and provide 2025 guidance on March 5, 2025.
(Sam Boughedda contributed to this article).