Adidas posted its results for the first quarter of 2024 on Tuesday, reporting an eight percent increase in currency-neutral revenues and a 20 percent increase for its direct-to-consumer business. The German sportswear brand said that it saw strong growth for the quarter in every market except North America, where it posted a four percent decline that Adidas blamed on weak sales in wholesale channels.
Adidas CEO Bjørn Gulden explained on a conference call with media that Adidas is working to improve its inventory in America, and that he believes Adidas will be up on sales in North America by the second half of the year.
“We didn't sell in the right product at the beginning of 23,” Gulden said, “and that's been dragging our sell-through with many American retailers for a long period of time.”
In addition to running through Adidas’ financial results, Gulden responded to a handful of trends and recent Three Stripes headlines. Here, from the call, are his takes on the Yeezy business, Nike poaching Germany from Adidas, and that infamous Rishi Sunak fit.
Adidas Yeezy Sales in 2024
Yes, Adidas is still selling Yeezys.
The never-ending breakup will continue to peter out in 2024 as Adidas offloads its remaining $215 million worth of Yeezy inventory. Adidas sold around $161 million worth of Yeezys in the first quarter, and expects to sell around $376 million total worth of Ye’s sneakers in the 2024 fiscal year.
Those numbers are up from Adidas’ last projection, which put 2024 Yeezy revenue at $268 million.
Per a press release announcing the results, Adidas plans to sell the remainder of its Yeezy inventory at cost, and doesn’t anticipate upcoming sales contributing to the company’s profits for the rest of 2024.
“We assume that we will not make any more profit on the Yeezy inventory,” Gulden said.
Adidas Campus vs. Adidas Samba
Save for the Yeezys, no Adidas sneaker this decade has been hotter than the Samba, a retro model that’s enjoyed a rebirth thanks to big collaborations and co-signs from trendsetters like ASAP Nast and Frank Ocean.
But as we reach peak Samba, Adidas says that the Campus model is catching up.
“Campus is actually outselling the Samba in certain markets,” Gulden said on the call, “and is also trending very, very high on social media.”
In the presentation, Adidas showed a graph that had the Adidas Campus as the most searched-for lifestyle shoe across brands in March 2024. Adidas’ graph showed the Samba and Gazelle in second and third places, respectively.
Gulden said that Adidas uses these metrics to determine whether or not a shoe is becoming saturated, and allocates product accordingly.
Rishi Sunak Wearing Sambas
Speaking of Sambas, what does Adidas’ chief executive think of UK Prime Minister Rishi Sunak’s controversial support of the classic indoor soccer shoe? Gulden was diplomatic when asked.
“Anybody in the world can wear our product and I’ll be happy if they wear it,” Gulden said.
Sunak donned a pair of Sambas in April, during an interview about his tax policies, sparking intense response on social media. The episode was, in the eyes of many commenters, the final blow to any semblance of cool the Samba still had. A giggling Sunak later issued a “fulsome apology” to the Samba community for ruining the shoe.
Despite the backlash, Adidas’ CEO said that the prime minister’s endorsement was a fun story that had “no impact at all” on the status of the shoe, negative or otherwise.
Nike’s Germany Football Deal
Adidas rival Nike made headlines in March when it signed Germany’s national football team to a massive deal worth a reported $108 million annually. The Nike deal, which will run from 2027 to 2034, interrupts the 77-year partnership between Adidas the team, which is known in Germany as the DFB.
German society did not receive the news lightly—politicians lamented the idea of a Nike-branded German squad and the DFB even posted an FAQ on its website after news of the deal was made public.
Gulden did not bristle when asked on the call about Nike signing away Adidas’ de facto home team.
“I’m not annoyed at all,” Gulden said.
The CEO reasoned that Nike simply placed more value in the team than Adidas did, and that the DFB had the right to sign the richer contract. (Adidas is paying around $54 million annually, says German business paper Handelsblatt, vs. Nike’s $108 million.) Gulden reiterated that Adidas would not be spending that much money to outfit teams, and that it wouldn’t let Nike drive up the price for deals across the market.
“We will not pay those prices,” Gulden said.
Korea Is Setting Trends
Adidas reported a revenue growth of seven percent for Japan and South Korea, which it says was driven by a double-digit increase in direct-to-consumer business. Gulden put an emphasis on South Korea in his prepared remarks, giving the country credit for being ahead of recent trends.
“They were the first one on the terrace trend,” Gulden said, referring to Adidas’ soccer sneakers like the Samba and Gazelle that have been resurgent in the 2020s. “They are also the first one now when it gets to the so-called low profile trend. So we’re using South Korea also to read different trends.”
Adidas catered to the country in the past year by releasing collaborations with Korean sneaker boutique Kasina, designing a Gazelle modeled after aristocratic Korean footwear, and tapping K-pop girl group Blackpink (who got a shoutout from Gulden in a 2023 earnings call) for a campaign.
