Record-High First-Quarter Revenue for Adidas
Operating Profit Up 81% Year-on-Year
Stock Recovers All Losses After Reciprocal Tariff Announcement
Sharp Contrast with Rival Nike, Down Over 11%
German sports brand Adidas posted nearly double the operating profit in the first quarter of this year compared to the same period last year, setting a new record for first-quarter results. While rival brand Nike saw a double-digit decline following the aftermath of President Donald Trump's "reciprocal tariffs," Adidas achieved strong results by riding the wave of the retro trend.
According to the Financial Times (FT) on April 23 (local time), Adidas announced in its preliminary first-quarter earnings report that its operating profit reached 610 million euros (approximately 990.1 billion won), an increase of 81.5% from the same period last year (336 million euros, approximately 545.3 billion won). This figure significantly exceeded the market forecast of 546 million euros (approximately 886.2 billion won). Revenue rose 13% year-on-year to 6.1 billion euros (approximately 9.9 trillion won), marking the highest first-quarter revenue in the company’s history.
FT assessed that the surge in sales of retro-style footwear products such as the Adidas Samba and Gazelle drove the expansion in revenue. The global retro craze has boosted Adidas’s performance. In addition, Adidas’s aggressive marketing efforts played a significant role. The company increased product sales by re-releasing the Samba and Gazelle models in a variety of new colors. Furthermore, celebrities such as Jennie and Jung Hoyeon, who are Adidas’s global ambassadors, as well as Suzy, Kim Nayoung, and Taeyeon, were frequently seen wearing Adidas products, which encouraged consumer purchases. In fact, the Adidas "Tokyo" and "Taekwondo" models became widely known as "Jennie’s shoes" after Jennie was seen wearing them, generating significant buzz.
On the German stock market, Adidas shares rose by more than 5% in after-hours trading following the earnings announcement, recovering most of the losses from the shock of President Donald Trump’s reciprocal tariff announcement on April 2. President Trump has suspended reciprocal tariffs on trading partners other than China for 90 days. The U.S. reciprocal tariff rate on Vietnam, a major production base for Adidas, is 46%.
In contrast, shares of competitor Nike remain down by more than 11% compared to just before the reciprocal tariff announcement. During last month’s earnings release, Nike projected that this quarter’s revenue would "decline by about the mid-teens percent." FT commented, "Adidas’s earnings announcement highlights the diverging fortunes of sports brands amid a global trade war." However, Adidas did not mention its annual performance targets in this preliminary earnings report. The company is scheduled to announce its full first-quarter results on April 29.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
