adidas on Tuesday shared its financial report for Q1 2024, revealing that it surpassed expectations with an 8% increase in sales to reach €5.46 billion EUR in the three months ending March 31.
As the company continues to repair the damages caused by losing its popular YEEZY line and severing ties with Ye at the tail-end of 2022, adidas' first-quarter growth was largely driven by higher demand for its Samba, Gazelle, Spezial and Campus franchises. "The growth is of course driven by our Lifestyle business right now, especially Originals footwear, but we also see that the higher end of our Running, Football and Basketball product is doing well," said adidas CEO Bjorn Gulden in a statement.
The sales of the brand's remaining Yeezy inventory generated revenues of roughly €150 million EUR during the quarter. Footwear revenues climbed 13% on a currency-neutral basis, thanks to momentum in the aforementioned Originals and Football categories, while apparel saw a 2% rise in sales. The brand recorded lower sell-in into the wholesale channel for apparel, due to high inventory levels in North America. Accessories sales, meanwhile, fell 1% in the period.
“We are proud but also surprised about how quickly the brand has been accepted again by the kids on the street,” Gulden said in a press conference, according to WWD. “Our goal now is to manage the franchises, and phase different products in and out to avoid discounting again. To be very honest, you couldn’t ask for more luck with timing."
The company saw positive growth in several regions, including Europe, where sales were up 14%, and Latin America, where sales climbed by 18%. Greater China saw an 8% increase, while Japan and South Korea recorded a 7% rise. North America, however, experienced a 4% decrease in sales, thanks to a double-digit fall in wholesale. Gulden noted that the region is lagging "six to nine months behind" in the brand's planned turn around, and he predicts that it will not see growth until the latter half of 2024.
Looking to the future, Gulden stated, "We will continue to ‘over invest’ into the product, into the brand, into sales and marketing to ensure continued growth. We will not try to optimize shortterm profit. We know we are not as good as we should be, but I feel that we are making the progress that we had hoped for."
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