Adidas surges after holidays lifted sales of sneakers

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Adidas AG reported better-than-expected quarterly results, sending its shares soaring amid the sustained boom for retro sneakers like the Samba.

The German sportswear company generated operating profit of €57 million ($59 million) in the fourth quarter after a loss a year earlier, it said in a statement. That drove full-year operating profit to €1.3 billion, higher than it forecast in October, based on unaudited figures.

The stock jumped as much as 6.4% in early Frankfurt trading, the most in nine months. Adidas shares have climbed about 50% in the past year.

Chief Executive Officer Bjorn Gulden has been winning over investors with a back-to-basics focus on sports and developing new footwear and apparel. He’s hoping to close the gap with struggling industry leader Nike Inc.

Adidas said it aims to deliver double-digit sales growth and to increase operating profit in coming years despite macroeconomic uncertainty. The company will publish final results on March 5, along with financial guidance for 2025.

The early figures suggest that Adidas is experiencing an “appreciable acceleration” in North America, Jefferies analyst James Grzinic said in a note. The company has struggled in recent years in the US, the world’s single largest sports market. It’s shown progress lately with lifestyle products and its new offering of basketball sneakers.

Currency-neutral revenue reached €6 billion for the quarter, higher than the €5.3 billion average of analyst estimates.

Yeezy Woes

The company had pledged to return to growth in 2024 after an underwhelming 2023, when Adidas suffered from the canceled Yeezy partnership with the rapper and designer Ye, formerly known as Kanye West.

Adidas probably generated about €50 million in sales from its remaining Yeezy products, which didn’t have an impact on profitability, Cristina Fernandez, an analyst at Tesley Group, said in a note.

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The strong quarter suggests that Adidas’s momentum will continue in 2025 and beyond, according to Fernandez. The analyst raised her price target for the stock to €290.

Adidas is growing across all its regions and divisions, with more interest from consumers and retailers in both sports and lifestyle products, it said. “We see potential to increase our market share in all markets,” Gulden said.

Demand for classic sneaker models, including the Samba, Spezial and Campus, has helped Adidas win back favor with retail store partners. In recent years, they had pushed newer labels including On Holding AG and Deckers Outdoor Corp.’s Hoka, while Adidas and Nike built out their own e-commerce channels.