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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