By Nina Kienle


Adidas posted net profit that beat analysts' expectations and confirmed its preliminary figures for its first quarter, citing brand momentum.

The German shoe and sportswear major said Tuesday that for the three months ended March, net profit swung to 170 million euros ($182.3 million) from a loss of EUR39 million for the same period the prior year. The figure beat analysts' expectations of a EUR163.66 million profit, according to consensus estimates provided by Visible Alpha.

The gross margin improved by 6.4 percentage points to 51.2%, reflecting healthier inventory levels, reduced discounting, lower sourcing costs and a more favorable business mix, it said.

Growth in Europe, Emerging Markets, and Greater China was partly offset by a decline in North America, reflecting the conservative sell-in approach in response to still elevated inventory levels in this market. Europe currency-neutral sales increased 14% during the quarter, with revenue increasing in Emerging Markets and Greater China by 17% and 8%, respectively. North American revenue declined by 4%.

Inventories decreased 22% to EUR4.43 billion, reflecting the company's initiatives to significantly reduce inventory levels, it said.

"The growth is of course driven by our Lifestyle business right now, especially Originals footwear, but we also see that the higher end of our Running, Football and Basketball product is doing well," Chief Executive Bjorn Gulden said. The company sees still strong and growing demand for footwear franchises Samba, Gazelle, Spezial, and Campus, with new franchises like SL72 becoming high in demand, he said.

For 2024, the company confirmed its outlook, having raised it on April 16 after a successful start to the year. Adidas assumes that its remaining Yeezy inventory will be sold on average cost throughout the remainder of the year, resulting in sales of around EUR200 million but no further profit contribution, it said.


Write to Nina Kienle at nina.kienle@wsj.com


(END) Dow Jones Newswires

04-30-24 0247ET