Adidas announced preliminary results for its second quarter on Tuesday that reflect the continued turnaround at the German sportswear giant. Revenue for the three months ending with June rose 9% to $6.35 billion (€5.82 billion based on current exchange rates). The gain was 16% on a currency-neutral basis and if Yeezy sales are excluded both years.
Operating profit nearly doubled to $377 million. The company cited better “sell-throughs, reduced discounting, lower sourcing costs and a more favorable category mix” for the profit surge.
Adidas topped Wall Street estimates for revenue and profits, and the company raised its yearly forecast after the better-than-expected performance. Adidas now expects currency-neutral revenue to increase at a high-single-digit rate. Operating profit is projected at “around €1 billion” ($1.09 billion), or roughly 40% higher than the previous forecast.
The results stand in sharp contrast to Nike’s financial release last month. Expectations were modest for Nike ahead of its fourth-quarter earnings report, and the company still whiffed on that low bar.
Wall Street analysts expected flat revenue for Nike of $12.86 billion for the three months ending in May, according to S&P Global Market Intelligence, but the company reported revenue of $12.6 billion, down 2%. During the earnings call, Nike CFO Matthew Friend said revenue would be down “mid-single digits” for the 2025 fiscal year, including 10% in the first quarter.
“Management credibility is severely challenged, and potential for C-level regime change adds further uncertainty,” Jim Duffy, Stifel analyst, wrote in a Nike research note after Nike released its results.
For the fiscal year, Nike reported revenue of $51.4 billion, a scant 0.3% increase over the previous year. The only years worse in the past two decades for the Swoosh were at the start of COVID-19 (2019-20) and on the heels of the financial crisis (2009-10).
Wall Street has viewed Nike and Adidas very differently during the past 12 months. Nike shares plunged 20% on the poor earnings report, marking the worst trading day for since the company’s IPO in 1980. Shares are down 32% over the last year. Adidas’ stock is up 33% during the same period.
