Adidas Q3 net profit increased by 73% exceeding expectations, with revenue in Greater China growing by 9% year-on-year | Financial Report Insights

Adidas Q3 once again demonstrated strong performance growth. The company achieved growth in all markets, channels, and product categories, especially in the lifestyle and performance categories with double-digit growth. Revenue in Greater China increased by 9% year-on-year.

On the 29th, Adidas released its third-quarter financial report for 2024.

• Revenue: In the third quarter, Adidas' global revenue was 6.438 billion euros, a 10% increase year-on-year in constant currency terms, and a 14% increase year-on-year excluding the impact of Yeezy;
• Profit: In the third quarter, Adidas' operating profit increased to 598 million euros, a 46% year-on-year increase. Net profit from continuing operations increased from 270 million euros in the same period last year to 469 million euros, a growth of over 73%.
• Gross Margin: In the third quarter, the company's gross margin increased by 2.0 percentage points to reach 51.3%.

Greater China Revenue Up 9% Year-on-Year, Strong Performance in Q3 Footwear Business

As one of the most important strategic markets, Adidas' performance in Greater China has been steadily improving, achieving "quality growth" for six consecutive quarters. In the third quarter of this year, revenue in Greater China reached 946 million euros, a 9% year-on-year increase; Europe saw an 18% year-on-year growth, Latin America grew by 28%, Japan and Korea by 18%, and emerging markets by 16%.

Over the past two quarters, the continued growth of the Adidas brand in Greater China, as well as an earlier-than-expected return to growth in North America, have strengthened Adidas' confidence in its medium to long-term prospects. In September this year, Adidas Global CEO Bjørn Gulden, during his visit to China, stated:

"The Chinese market has always been very important to us. China is not only the most important sports consumption market, but also one of Adidas' most important production, research and development, and design innovation centers globally. We are confident in the future development of the Chinese market.

As of now, over 80% of Adidas products sold in the Chinese market are 'Made in China,' and more innovative products will be launched in China first in the future."

In terms of product categories, Adidas' footwear business performed particularly well in the third quarter of 2024, with sales increasing by 14% year-on-year, driven by strong growth in the classic Originals series, which boosted the entire footwear business.

Adidas' lifestyle and performance products also achieved double-digit growth. Apparel products saw a 5% increase, driven by categories such as football. Additionally, accessory product sales recovered with a 10% year-on-year increase.

Gulden stated that in the third quarter, Adidas achieved growth across all markets, channels, and categories. The double-digit growth in both sportswear and performance categories also indicates that Adidas' business is currently in a good "balance."

Based on better-than-expected third-quarter performance and strong brand momentum, Adidas raised its full-year performance guidance, expecting revenue growth of 10% in 2024, previously expected to be "high single-digit growth," and operating profit to reach around 1.2 billion euros, previously estimated at around 1 billion euros Today, adidas AG's European stock rose by nearly 2.5% to 219 euros per share.