The following is a summary of the Adidas AG (ADDYY) Q1 2024 Earnings Call Transcript:
Financial Performance:
In Q1 2024, Adidas achieved currency-neutral sales growth of 8%, excluding the Yeezy collaboration contribution of €150 million, underlying sales growth was 5%.
Gross margin improved to 51.2%, up from 44.8% in Q1 2023, underlying gross margin stands at 50.5% without the Yeezy collaboration.
Operating profit witnessed a significant increase from €60 million to €336 million.
Inventory was reduced by €1.2 billion to €4.4 billion.
The company projects a mid- to high single-digit growth in top-line and operating profit to rise from €500 million to €700 million.
Net income improved from a negative €24 million in Q1 2023 to a positive €171 million in Q1 2024.
Business Progress:
Adidas witnessed 2% growth in wholesale business, 11% in direct-to-consumer sales, and 34% growth in e-commerce.
Product launches were significant for Adidas including Supernova Rise for running specialty and the Agravic Speed shoes for trail running.
Footwear witnessed a growth of 13%, with lifestyle footwear being a significant driver.
Future investment will focus on marketing, partners, infrastructure such as an automatic distribution center in Europe, and product innovations.
Adidas experienced growth in its performance products, which is credited to their successful Originals line.
For market expansion, Adidas is optimistic about gaining more market share in China, despite the economic uncertainties.
More details: adidas AG IR
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