Adidas said that revenues were up 13 per cent year-on-year to €6.2 billion in the first quarter of fiscal 2025 on Tuesday, confirming last week’s preliminary results and exceeding analyst expectations.
Excluding Yeezy sales from the year prior, revenues were up 17 per cent. (Adidas completed the sale of the remaining Yeezy inventory at the end of last year, so the first-quarter results do not include any Yeezy contribution.) “There is no more Yeezy business. There is no more inventory. That whole thing is history,” Adidas CEO Bjørn Gulden told investors on Tuesday morning.
“We had a very strong first quarter. To be honest with you, it was stronger than we expected,” Gulden said on Tuesday’s call. “I think partly because we have very good product that we have launched, and secondly that both the brand and the operations in the different markets are working better and better. And that’s despite, of course, the challenges that we have talked about that have now been accelerated by the US tariffs.”
In dealing with tariffs, Gulden said that Adidas custom cleared as much inventory as possible before 4 and 9 April, re-routed products from China and conducted a pricing review. “I have seen certain press writing that Adidas is raising prices. That is not true. What we’ve said is that, should duties stay, then of course there will be price increases in the US market,” Gulden said. “But we will not be the first to move on prices, we will follow what the market leaders are doing. Should the duties go away again, there will not be price increases.”
The real price increases will be higher than the duties, he flagged, because brands need to keep margins for themselves and retailers. That said, Gulden declined to give numbers due to the speculative nature of the mathematics. “I hope you have the understanding that to give straight answers is very difficult when you don’t know what the duties are tomorrow.” Right now, most global tariff rates sit at 10 per cent, with the exception of China, Canada and Mexico, until the 90-day pause expires in July.
The tariff situation weighs on Adidas’s full-year outlook. Though the company confirmed its expectation that sales will increase at a high-single-digit rate in 2025, executives flagged that volatility and macroeconomic risks have increased significantly since the company first issued its full-year outlook at the beginning of March. “Given the direct impact of the current tariffs that we see, and the danger of these tariffs going even higher after the 90 days — plus the possible negative impact on the consumer in the US — we warned that there might be some negative pressure on this, because we don’t really know,” Gulden said.
Direct-to-consumer (DTC) revenues grew 15 per cent year-on-year; and wholesale was up 18 per cent. Footwear led Adidas’s growth, up 17 per cent year-on-year, driven by double-digit growth in its Originals, sportswear, running, training, specialist sports and performance basketball lines. Gulden called out the still-strong performance of hit shoes such as Sambas and Gazelles. “For those who think that this is dangerous, don’t worry, the heat of these is being managed,” Gulden said, noting that Adidas is selling the shoes on a much wider scale than it was 12 months ago. Focus areas for growth are “low profile lifestyle” sneakers (already generating buzz among fashion folks) and “lifestyle running” sneakers. Gulden also hinted at a Superstar comeback. Beyond shoes, apparel revenues were up 8 per cent year-on-year, while accessories were up 10 per cent.
By region, Latin America and emerging markets (including Southeast Asia and the Pacific region) performed well, up 26 per cent year-on-year and 23 per cent, respectively. European revenues were up 14 per cent year-on-year. Greater China revenues rose 13 per cent, as did Japan and South Korea. “There’s no doubt that our Chinese team are taking market share, we’re extremely happy with the development there,” Gulden said. On Japan and Korea, he added that the brand is trending positive in both of the “two trendy markets” in Asia.
North America revenues grew 3 per cent year-on-year, slowed by the phase-out of the Yeezy business. (Growth rises to 13 per cent when excluding Yeezy sales the year prior.) US trade policy and tariffs were a major point of interest for investors. Currently, about a third of Adidas’s footwear is produced in Vietnam, and another third in Indonesia. The company has reduced China production to a minimum.
Gulden reminded investors that the US makes up only about 20 per cent of Adidas’s revenue, and is confident that the company can help finance the US losses by overachieving in other regions.
Ultimately, uncertainty is the name of the game this quarter — and this year. “There are so many scenarios, but we feel very calm. We focus on the 80 per cent that is doing well. We focus on delivering product to the US that we think we can sell. We observe any price changes, and as soon as we see something, we act on it,” Gulden told investors. “I think that’s the only way you can act today.”
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