Adidas shares jump to three-year high after annual profit beat

(Sharecast News) - The share price of Adidas jumped on Tuesday to its highest in more than three years after the sports apparel and footwear giant smashed its own expectations with fourth-quarter profits and delivered a confident outlook on current trading.

Revenues in the fourth quarter were up 19% in constant-currency terms at �5.97bn, an a big improvement in gross margins to 49.8%, from 44.6% the year before, helped the company record an operating profit of �57m, compared with a loss of �377m previously. Analysts were expecting a loss of �63m for the quarter.

As a result, operating profits for 2024 as a whole surged to �1.34bn, up from �268m in 2023 and well ahead of Adidas's own guidance of �1.2bn. Annual revenues were up 12% at constant currency at �23.68bn.

"I am very pleased the way the fourth quarter and the full year developed for us at adidas," said chief executive Bj�rn Gulden.

"19% currency-neutral growth (+24% reported) in a quarter that in general was difficult for the trade underlines the strong momentum we currently see for our brand and our products."

Looking ahead, Gulden said he "feel[s] good about the future", with the potential to increase market share across all markets.

"There is a lot of macroeconomic uncertainty right now, but we clearly have the goal to again grow double-digit with the adidas brand and use that growth to continue to improve our operating profit and make further progress towards our 10% margin target."

By 1151 in Frankfurt, the stock was up 6.3% at �258.80, trading at levels not seen since November 2021.