Adidas Stock: Strong Recovery Despite Market Skepticism

Adidas has staged a remarkable comeback in 2024, posting a net profit of €764 million after suffering a €75 million loss the previous year. The German sportswear giant saw its sales climb 11% to approximately €23.7 billion, with operating profit soaring to €1.3 billion from just €268 million in 2023. This impressive performance translated into earnings per share of €4.24, a substantial improvement from the €0.67 loss recorded in 2023. Despite this turnaround, investors responded cautiously, with shares dropping over 5% following the announcement. The company plans to reward shareholders with a significantly increased dividend of €2.00 per share, nearly tripling the previous year's payout of €0.70. Particularly encouraging was the company's performance in key markets, with China returning to double-digit growth and North America achieving 15% growth in the final quarter.

Outlook Remains Positive Despite Yeezy Exit

Looking ahead to 2025, Adidas has set ambitious targets with projected currency-adjusted sales growth in the high single-digit percentage range. The core Adidas brand is expected to deliver at least 10% growth, with double-digit increases anticipated in both North America and China. Operating profit is forecast to reach between €1.7 and €1.8 billion, up from €1.337 billion in 2024. Notably, these projections come without any contribution from Yeezy products, as the company has now completed selling off its remaining inventory from the terminated partnership, which contributed €650 million to revenue and €200 million to operating profit in 2024. These goals align with Adidas' medium-term targets for 2026, which include achieving 10% currency-adjusted sales growth, a 10% EBIT margin, and a gross margin between 50% and 52%.