adidas On the Up! Campus Outselling Samba, Korean Trend-Setters, and More Yeezys
It was only a few weeks ago that revealed they had a boasting a higher estimated full-year-guidance for the rest of 2024. Team Trefoil have now posted their full results for the first quarter, and they’re on the up. There's been plenty of highs, and while there are some lows too, they didn’t seem to bother the team at Herzogenaurach.
Classics Keep Performing
For Q1, 2024 adidas boasted an eight percent increase in currency-neutral revenues alongside a 20 percent increase for their DTC business. Bjørn Gulden, adidas CEO, stated: ‘Sales, gross margin, and operating profit were all better than initially planned. Our full-price sales in our DTC channels were strong and our sell-out with our retail partners was higher than the sell-in’. Credited for this rise was the demand for Originals footwear and franchises like the and which according to Gulden are ‘very strong and growing’. The Samba is no doubt the standout for Team Trefoil over the past decade, as it has seen booming growth across the board. We are now reaching the peak of Samba hype though, as UK Prime Minister Rishi Sunak was infamously documented as a wearer of the shoe, and if that’s not a nail in the coffin, we don’t know what is! Despite the cultural cache declining of their ubiquitous sneaker, adidas aren’t too worried, because their Campus is actually outselling the Samba in select markets around the globe. Higher end product for running, basketball and football also continued to see demand from consumers, especially as big sporting events like creep up.
The Home Team
For the football category, adidas saw double-digit growth across wholesale and DTC, thanks to jersey sales; however, it wasn’t all sunshine and rainbows. Back in March, Nike made headlines across the globe after signing Germany’s national team to a gargantuan deal reported at $108 million that is set to run from 2027 to 2034. Germans weren’t happy that their team was set to rock Swoosh-branded kits, with politicians getting involved and the country’s football association (DFB) even putting up about the controversial partnership switch. In the presentation of the results, Gulden simply stated that he wasn’t annoyed, and that the DFB had every right to take the higher contract (adidas was reported to pay the team $54 million annually). The CEO also took a hardline stance, stating that adidas won’t let their competitors drive up the standard market price for outfitting teams, and they won’t be paying those higher prices.
Yeezy's Not Done Yet
adidas’ sales contributed to the rise in sales, especially on the e-commerce side; however, they’re seeing the , with their almost-defunct Ye partnership finally wrapping up. Q1 saw adidas report around 150 million euro in sales of Yeezy product, and they expect to sell the rest of the product for around 200 million euro in sales throughout the remainder of 2024. However, these sales will be for cost price, and the sportswear brand isn’t expected to make any more profits off the franchise. The Yeezy effect helped to increase the adidas e-commerce growth by 34 percent, but even without Ye, their digital platforms received double-digit growth.
Dip in North America
Team Trefoil seem to finally be on the up, as they witnessed growth in all markets except North America, which saw a 4 per cent decline in revenue over Q1. This double-digit drop has been credited to their wholesale channels, as the company takes a more hardline ‘sell-in’ approach, with lower inventories, less discounted and better growth margins. Despite this dip in North America, European sales increased by 14 per cent during Q1, with sales in Greater China up by 8 per cent. Revenues in emerging markets grew by 17 per cent, with Latin America boasting double digit growth with an 18 per cent increase. There was also big 7 per cent increase in Japan and Korea, led by double-digit increases in their DTC business in those regions. Gulden also stated that Korea is the country they’re looking at for upcoming trends, mentioning their early jump on the Terracewear trend.
As a result of this positive growth, adidas have revised the full-year projection for the operating profit, raising it from 500 million euro to 700 million euro. Stay locked to Sneaker Freaker to keep updated.