Adidas Forecasts Moderate Profit Growth in 2025 Amid Higher Costs and Yeezy Exit
Go Wire
March 5, 2025
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Adidas AG expects operating profit in 2025 to reach between $1.84 billion and $1.94 billion, driven by high-single-digit revenue growth and improving market conditions. However, the absence of Yeezy-related sales, which contributed around $216 million in 2024, along with higher marketing and operational costs, may limit profit expansion.
The company saw a strong recovery in 2024, with operating profit jumping to $1.45 billion from $289 million in 2023. Currency-neutral sales rose 12%, exceeding expectations, with double-digit growth in Europe, Greater China, and Latin America.
Net income rebounded to $890 million, reversing a $63 million loss the previous year. Basic earnings per share improved to $4.58, up from a $0.72 loss in 2023. Gross margin climbed to 50.8%, benefiting from lower costs and reduced discounting.
Direct-to-consumer revenue grew 11%, with e-commerce sales rising 6%, or 18% excluding Yeezy. Wholesale revenue also saw strong momentum, increasing 14%. CEO Bjørn Gulden emphasized that demand is strengthening across both lifestyle and performance segments, boosting Adidas’ market share.
Despite macroeconomic uncertainties, Adidas remains confident in its product pipeline and regional strategies. Inventory stood at $5.39 billion at the end of 2024, providing a solid foundation for future sales. The company also strengthened its financial position, cutting net borrowings to $3.91 billion, with a reduced leverage ratio of 1.5x from 3.3x a year earlier.
Reflecting its improved outlook, Adidas has proposed a dividend increase to approximately $2.16 per share, up from $0.76 in 2023.
Going forward, Adidas aims to expand in North America and China, where demand remains strong. Balancing investments in brand growth and innovation with disciplined cost management will be key to meeting its 2025 profit targets.