The retailer reported that the company’s gross margin reached 50.8% in Q2, compared to 50.9% in 2023, whereas the underlying adidas gross margin improved strongly, reflecting better sell-throughs, reduced discounting, lower sourcing costs and a more favorable category mix. The significantly smaller Yeezy business had a negative impact on the year-over-year comparison. Yet, excluding Yeezy sales in both years, currency-neutral revenues still increased 16% during the quarter.
The company’s operating profit is now expected to reach a level of around 1.0 billion euros instead of the previous 700 million euros.
Following the better-than-expected performance during the quarter and considering the current momentum, the company has increased its full-year guidance. Compared to a few months ago, adidas now expects currency-neutral revenues to increase at a high-single-digit rate in 2024 instead of a mid- to high-single-digit rate.
Overall, the company still continues to expect unfavorable currency effects to weigh significantly on the company’s profitability this year. These effects are negatively impacting both reported revenues and the gross margin development in 2024.
