Adidas’ (ADDYY) (ADS) Germany-listed shares shot up by nearly 4% today after the sportswear giant issued a robust full-year outlook. The company is slated to report its second-quarter results on July 31.
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Adidas’ Preliminary Q2 Numbers
Adidas also announced promising preliminary numbers for Q2. The company’s revenue increased by 9% to €5.82 billion, and gross margin remained at a healthy 50.8%. Moreover, excluding Yeezy sales, its revenue jumped by 16% in currency-neutral terms. Importantly, Adidas’ robust gross margin points to lower sourcing costs, a favorable product category mix, and better sell-throughs.
ADS’ Hiked Outlook
Driven by this Q2 performance, Adidas hiked its outlook for the full year. The company now anticipates a high-single-digit growth in its top line for 2024. Previously, it had anticipated revenue growth at mid-to-high single digits for the year. Notably, Adidas expects operating profit for the year at €1 billion, compared to its prior estimate of €700 million.
Today’s price gains further add to the nearly 38% jump in Adidas’ share price over the past year. Adidas stock had been under pressure in recent weeks after the company received a whistleblower complaint accusing its senior China staff of taking bribes to the tune of millions of euros. In the aftermath, two of its China employees left the company amid its corruption probe.
Adidas’ Upcoming Q2 Numbers
A blockbuster Q2 print on July 31, however, could propel Adidas stock to new highs for the year. Analysts expect the company to post an EPS of €0.73 on revenue of €5.63 billion for the quarter. In the comparable year-ago period, the company had posted an EPS of €0.48.
What Is the Price Target for Adidas?
Overall, the Street has a Moderate Buy consensus rating on Adidas, alongside an average ADS price target of €233.83.
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