Adidas, the renowned German sportswear giant, successfully returned to profitability in 2024, significantly exceeding expectations with robust performance metrics. The company's currency-neutral sales soared at a remarkable double-digit rate, reflecting the strong momentum behind its brand, particularly within the footwear sector.
For the fiscal year concluding on December 31, 2024, Adidas reported an attributable net income of 764 million euros. This impressive figure marks a sharp turnaround from a loss of 75 million euros in the previous year, comfortably surpassing the FactSet consensus estimate of 760.9 million euros. Moreover, the company’s sales climbed to 23.68 billion euros, a notable increase from 21.43 billion euros, outpacing Adidas' growth aspirations of mid-single-digit percentages. The surge in revenue for Adidas is primarily attributable to its footwear segment, where currency-neutral sales jumped by an astonishing 17%.
This growth was driven by heightened consumer demand for its Originals, football, and training lines. Additionally, the apparel and accessories divisions also demonstrated solid expansions, with respective growth rates of 6% and 2%. This broad-based momentum illustrates the brand's strong performance across all categories, indicating a favorable reception in the market. Geographically, Adidas achieved double-digit growth in virtually all regions, with Latin America leading the charge at an impressive 28%.
Europe, its largest market, followed closely with a 19% increase. However, North America stood out as the only region where Adidas experienced a decline, with sales slipping 2%, largely attributed to decreased sales of the Yeezy line. "Going from single-digit growth at the beginning of the year to 19% currency-neutral growth in the fourth quarter—despite the challenging trade environment—underlines the strong momentum we currently see for our brand and our products," commented Chief Executive Officer Bjørn Gulden.
"We clearly see that consumers' and retailers' interest is growing across both Lifestyle and Performance segments and in all markets." In recognition of its strong performance, the supervisory board of Adidas plans to propose a dividend of 2 euros per share during the annual general meeting scheduled for May 15.
This is a substantial increase from the 0.70 euros per share paid out the previous year. Looking ahead to 2025, Adidas projects high-single-digit growth rates in currency-neutral sales, fueled by continued double-digit gains across all market segments for the Adidas brand. Operating profit is anticipated to fall within the range of 1.7 billion euros to 1.8 billion euros. However, analysts at RBC Capital Markets have flagged Adidas' 2025 outlook as "conservative," cautioning that it could pose a potential drag on the company’s share value.
They noted, "We anticipate Adidas will deleverage its balance sheet, largely supported by free cash flow generation, which by FY26E should also lead to the reinstatement of the share buyback program and a return to a more attractive shareholder cash returns profile." Despite this positive news, the stock experienced a decline of nearly 4% during midmorning trading, indicating a cautious sentiment among investors..