Updated 10:36 a.m. ET March 5
Although German sportswear giant Adidas did much better than it had expected to in 2024, executives at the company said a more volatile global environment and the threat of a trade war, sparked by tariffs set by U.S. President Donald Trump’s administration, was keeping them cautious this year.
On Wednesday morning in Germany, Adidas reported growth of 12 percent, on a currency neutral basis, to 23.68 billion euros in sales. This went beyond the company’s own forecast of 10 percent growth.
The positive figures for 2024 came on the back of a particularly successful fourth quarter, in which revenues rose 19 percent to 5.97 billion euros.
Adidas’ operating profits also rose significantly over 2024, zooming from 268 million euros in 2023 to 1.34 billion euros.
“I am extremely proud of what we have achieved,” chief executive officer Bjorn Gulden said at a press conference at the company’s headquarters in Herzogenrath, southern Germany. “We have been together as new management for two years now,” Gulden said, referring to the fact that he started as the Adidas boss in early 2023, “and we had some things to fix, and we did that in 2023, and I think we all now agree we became a better company in 2024.”
Adidas has already had a good start to this year with healthy order books into the third quarter, he said. But this year, along with most other multinational brands, the company was likely to be facing challenges outside of its control, both Gulden and Adidas’ chief financial officer Harm Ohlmeyer conceded.
This meant, as market analysts noted, the company’s guidance for the year was comparatively conservative given 2024’s results. Adidas expects currency-neutral revenues to grow in the high-single digits and for operating profit to come in somewhere between 1.7 billion and 1.8 billion euros. This was below market estimates of 2.1 billion euros and some analysts saw it as a potential sign of slowing growth.
But Gulden, who is known for his cautious financial prognoses, said the company was actually more ambitious than that and hoped for double-digit growth again in 2025 — although it was impossible to tell right now, given geopolitical volatility.
“We are very positive, we’ve had a good start, but we’re living in a very volatile world,” Ohlmeyer confirmed. “Every morning you wake up and there’s something else you need to react to. But we’re ready for that, we’re monitoring everything and we’re not taking anything for a given.”
The executives also said they hadn’t come up with any kinds of estimates as to the financial impact of a potential trade war on Adidas, if one was sparked by escalating tariffs set by the new U.S. administration under Trump.
Looking at the market, nobody has raised prices yet, Gulden noted. And Adidas was confident about the ability of its “extremely flexible” supply chain to adapt, he added. For several years Adidas has been diversifying sourcing from China, moving it to countries like Vietnam and Indonesia. This means Adidas’ U.S.-bound products would initially only have limited exposure to any Trump-driven tariffs on China.
“But it’s the overall impact we have no idea about,” Gulden explained. “You know, if there are more 25 percent duties coming, and they are on more countries, then what we do know is that prices will go up and there will be inflation. How much [these will be] we don’t know. We only know we will have to adjust very, very quickly.”
In fact, the CEO mused in a surprising aside, “my vision would be to produce everything on ships. Then you move the ships around,” he added with a laugh, “But that’s probably not happening in my lifetime.”
A more adaptable and agile supply chain is part of Gulden’s overall strategy toward what he calls “a global brand with a very local mindset.”
This involves local design teams headquartered in different markets — the company now has design hubs in Los Angeles, Portland, Ore., Shanghai, Tokyo and Herzogenrath — that create for the specific desires of consumers there, as well as more localized production facilities where, for example, China produces for the Chinese market, India in India and so forth.
It was also part of the reason for the recently revealed cutting of 500 “roles” at Adidas’ German headquarters. The process is underway and is about reducing complexity and bureaucracy, Gulden explained, as well as putting more focus on localization, rather having top-heavy management in Germany.
Last year Adidas saw sales rise 18.9 percent in Europe, 10.3 percent in Greater China, 10.1 percent in Japan and South Korea and 19.4 percent in its emerging markets category.
However, in North America, Adidas’ second-largest market, sales fell 1.6 percent in the full year. That’s despite the fact that by the end of last year, sales growth in North America had started to move into double digits. Between October and December last year, Adidas notched up 15 percent growth in North America, the company reported.
The brand blamed the 2024 sales decline on the end of Yeezy sales there, as well as on its conservative sell-in approach to wholesale.
Last year Adidas finally closed the troubled Yeezy chapter. The brand had struggled after ending its particularly profitable collaboration with Ye, the rapper formerly known as Kanye West, in late 2022 due to the musician’s increasingly erratic behavior and offensive comments. But by the end of last year, Adidas had finally sold off all remaining Yeezy stock, reporting the sale of this left-over inventory brought in revenues of around 650 million euros over the year, with 50 million euros coming in the last quarter.
Around 260 million euros from Yeezy sales had also gone into a foundation Adidas has set up to fight against the kind of harms that offensive, hate speech can do, the executives noted.
During the press conference Gulden also gave a preview of some of the products in Adidas’ pipeline for 2025.
Last year, footwear sales rose 17 percent, while apparel and accessories went up 6 percent and 2 percent, respectively.
The company has reaped sales from the popularity of shoes in the so-called Terrace category but this was now receding somewhat. “I think it’s fair to say that in 2024 we had the hottest shoes,” Gulden claimed. “That [Terrace trend] is still scaling in certain markets and being managed in other markets.”
This year, focus may move from Terrace to the low-profile trend — shoes from sports like martial arts or motor racing with a very flat sole — as well as relaunched versions of, and collaborations around, the popular retro Superstar shoe and also on lifestyle running shoes.
Lifestyle running “is an area Adidas used to do well in but lost momentum in,” Gulden said. “So we have tons of new [lifestyle running] styles going into the market.” These will include 3D-printed shoes made out of foam, a first for the market, Gulden said.
There will also be more focus on training gear — that is, the clothes and shoes gym-goers wear — as well as on Adidas’ reentry into Formula 1 motor racing, and on investments in a variety of other, less popular sports.
Some of those other sports might not end up being particularly commercial propositions, Gulden explained, but they would also provide an “innovation playground” for Adidas’ designers and materials technicians.
Adidas then planned to “take the momentum we have in footwear and put it into apparel,” Gulden said. “More three-stripes, more colors, lots of retro styles, and also connections to soccer culture,” he added, pointing out that some trendsetters had started wearing football fan shirts, once the mark of a sports nerd, as hip streetwear.
Eventually that “brand heat” should extend to accessories, Gulden said, which had been somewhat neglected up until now. Accessories should be making up about 10 percent of Adidas’ total sales, he argued.
Currently footwear makes up around 59 percent of Adidas’ total sales, apparel 35 percent and accessories 6 percent.
