Sportswear brand adidas AG (DE:ADS) (ADDYY) reported an operating profit of €57 million in Q4, driven by its robust sneaker sales during the crucial holiday shopping season. The profits marked a significant turnaround from the operating loss of €377 million a year ago. Meanwhile, the company’s revenues increased by 24% year-over-year to €5.96 billion in Q4, surpassing average analysts’ estimate of €5.3 billion.
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Following the results, adidas’ Germany-listed shares rose by more than 3% on Tuesday, while its American depositary receipts (ADRs) in the U.S. surged by over 6%.
adidas Wraps Up 2024 on a High Note
Backed by its strong numbers in the fourth quarter, adidas finished 2024 on a high note. For the full year, revenues grew by 11% year-over-year, reaching €23.7 billion. Similarly, full-year operating profit rose to €1.34 billion, up from €268 million in 2023.
Over the past year, the company concentrated on capitalizing on the trend for its retro, multicoloured three-striped shoes, such as the Samba and Gazelle, to revitalize its brand and drive sales. It also made higher sales from its dwindling Yeezy inventory. In 2023, the company faced challenges due to the canceled Yeezy partnership with rapper and designer Ye, previously known as Kanye West.
Interestingly, adidas appears to be also benefiting from the downturn of its rival Nike (NKE). In its most recent quarter (Q2 FY25), Nike’s sales fell 8% year-over-year, with net income dropping by over 26%. Overall, analysts suggest that Nike’s turnaround will take longer than anticipated.
Looking ahead to 2025, adidas aims to achieve double-digit sales growth and increase operating profit. The company will release its final 2024 results and 2025 guidance on March 5.
Is adidas a Good Share to Buy?
On TipRanks, ADS stock holds a Moderate Buy rating, supported by 18 total recommendations, including 11 Buys, six Holds, and one Sell. The adidas share price forecast is €258.24, representing a 6.1% upside from the current price.
