From the Sector

adidas Sportswear launches its latest sport meets style drop, the ADIDAS Z.N.E. collection, in a campaign which brings together next-gen faces, including Tate McRae, Jude Bellingham and Noah Lyles, to showcase how all can stay connected through a shared love of football, athletics, dance, music and more, across the globe. The all-new set of hoodies, sweatshirts, pants, tees and shorts take on color blocking details, whilst the black parallel stripes symbolize the lines that connect communities and fandoms to inspire all to unite through sport and culture.

Fronting the new capsule of fresh looks is a collective of adidas’ next-gen trailblazers: Canadian singer-songwriter and dancer Tate McRae, actress and martial artist Xochitl Gomez, leading KPOP group BABYMONSTER, US track star Noah Lyles, Chinese snowboarder Su Yiming and football icons Jude Bellingham, Alessia Russo and Paulo Dybala. With each representing a community from the world of sport or culture, the ADIDAS Z.N.E. collection was inspired by the lines in their field of play – from the track, to the stage and pitch.

adidas launches its 19-piece FW24 New York Tennis apparel collection – a range of high-performance pieces built to optimize movement and reduce distraction.

The collection, which features blue and white colorways inspired by the hard courts of New York, has been crafted utilizing insights from motion capture technology. The technology, which uses digital image recording to test a moving target, measures the strain on an athlete’s body over time, revealing areas that generate the most heat during play.

These insights informed key design features, such as the strategic material placements of fabric and cut-outs. Following the natural curves of the body, they were purposefully placed in high-movement areas – such as the shoulders and under the arm – to help maximize players’ range of motion. Pieces featuring this technology include the women’s AEROREADY Dress Pro and the women’s HEAT.RDY Match Skirt Pro, which features pleats over the upper leg, allowing for maximum flexibility and adaptability, to help players change direction with ease.

White color blocking is placed in the shoulder and torso areas, which is where the most heat is generated, of the men’s HEAT.RDY FreeLift Polo Shirt Pro and men’s HEAT.RDY Tank Top Pro, to help keep players feeling cool. adidas’ AIRCHILL technology is leveraged to create ventilation zones in high-sweat areas of the body in the men’s AIRCHILL FreeLift T-Shirt Pro and women’s AIRCHILL Match Tank Pro, which uses thermally zoned, raised pattern motifs and mesh layers to maximize airflow.

The head-to-toe collection premiers at the final major tournament of the season and will be worn by athletes including Jessica Pegula, Caroline Wozniacki, Elina Svitolina, Maria Sakkari, Daria Kasatkina, Stefanos Tsitsipas and Felix Auger-Aliassime.

Martin Shankland, Executive Board member for Global Operations, has informed adidas AG’s Supervisory Board that, after 27 years with the brand, he will step down from the Executive Board and leave the company. In mutual agreement with Martin Shankland, the Supervisory Board approved the termination of his appointment as an Executive Board member as of August 10, 2024.

Martin joined adidas Russia/CIS in 1997. During his tenure as Managing Director, he established adidas Russia/CIS as the market leader through the creation of a strong direct-to-consumer business. After leading adidas Emerging Markets region from 2017, Martin joined the Executive Board in 2019, with responsibility for product operations, sourcing and supply chain as well as tech, data & analytics, non-trade-procurement and sustainability. During this period, Martin led major transformation initiatives, including creating a more responsive, transparent and sustainable supply chain and built a more tech and data capable organization aided by the insourcing of tech talent into a network of global tech hubs.

Hoa Ly, SVP Sourcing, will have responsibility for all sourcing operations at adidas reporting into adidas CEO Bjørn Gulden. adidas CFO Harm Ohlmeyer will assume additional responsibility for supply chain and tech. As of August 11, 2024, the company’s new Executive Board will consist of Bjørn Gulden (Chief Executive Officer, Global Brands), Arthur Hoeld (Global Sales), Harm Ohlmeyer (Chief Financial Officer) and Michelle Robertson (Global Human Resources, People and Culture).

Major developments:

• Currency-neutral sales up 11%, driven by adidas brand accelerating to 16% growth
• adidas brand up double digits across all channels with increases in all markets
• Underlying gross margin improves around 1.5 percentage points to 50.5% despite significant currency headwinds
• Operating profit of € 346 million compared to € 176 million in prior-year period
• Healthy inventories at a level of € 4.5 billion to support future top-line growth
• Full-year guidance upgraded on July 16 to reflect current brand momentum

Full-year outlook
High-single-digit revenue increase expected in 2024
On July 16, adidas raised its top- and bottom-line guidance as a result of the better-than-expected performance during the second quarter and taking into account the current brand momentum. adidas now expects currency-neutral revenues to increase at a high-single-digit rate in 2024 (previously: to increase at a mid- to high-single-digit rate). The company’s operating profit is now expected to reach a level of around € 1.0 billion (previously: to reach a level of around € 700 million). Within this guidance, adidas assumes the sale of the remaining Yeezy inventory during the remainder of the year to occur on average at cost. This would result in additional revenues of around € 150 million and no further profit contribution during the second half of 2024.

Outlook impacted by significant currency headwinds
The company continues to expect unfavorable currency effects to weigh significantly on its profitability this year. These effects are negatively impacting both reported revenues and the gross margin development in 2024. This was particularly the case during the first half of the year.

adidas announced preliminary results for the second quarter of 2024. In Q2, currency-neutral revenues increased 11% versus the prior year. In euro terms, the company’s revenues grew 9% to € 5.822 billion (2023: € 5.343 billion). Excluding Yeezy sales in both years, currency-neutral revenues increased 16% during the quarter.

The company’s gross margin reached 50.8% in Q2 (2023: 50.9%). The underlying adidas gross margin improved strongly, reflecting better sell-throughs, reduced discounting, lower sourcing costs and a more favorable category mix. The significantly smaller Yeezy business had a negative impact on the year-over-year comparison. The company’s second quarter operating profit increased to € 346 million (2023: € 176 million), including a contribution of around € 50 million from the sale of parts of the remaining Yeezy inventory.

Following the better-than-expected performance during the quarter and considering the current momentum, the company has increased its full-year guidance. adidas now expects currency-neutral revenues to increase at a high-single-digit rate in 2024 (previously: increase at a mid- to high-single-digit rate). The company’s operating profit is now expected to reach a level of around € 1.0 billion (previously: to reach a level of around € 700 million).

Within its guidance, the company assumes the sale of the remaining Yeezy inventory during the remainder of the year to occur on average at cost. This would result in additional sales of around € 150 million and no further profit contribution during the remainder of the year.

The company continues to expect unfavorable currency effects to weigh significantly on the company’s profitability this year. These effects are negatively impacting both reported revenues and the gross margin development in 2024. This was particularly the case during the first half of the year.

adidas Originals and Montreal-based design studio, JJJJound, return to present their latest collection.

Inspired by the Three Stripes’ sporting heritage and driven by a commitment to authentic storytelling, the second adidas Originals by JJJJound collection draws on quintessential footballing aesthetics with a 7 piece apparel, accessories, and footwear offering.

The apparel and accessories selection includes an all black track top and matching pair of track pants, a tonal white jersey, and a black airliner bag, as well as a co-branded football and bag set. The collection is then rounded out by a new take on the classic Samba sneaker.

Accompanying the launch of the collection is a campaign featuring football legend José Mourinho. Captured by photographer Liam MacRae amidst a backdrop of quotidian Portuguese life, the José campaign is an ode to Samba’s time honored legacy in sport and culture.

adidas unveils its FW24 London Tennis Collection – a range of apparel crafted with comfort in mind – including seamless material construction, to help players focus whilst performing in major moments on grass court.

Although a pure-white color spectrum is found across the entire collection, raised structures implemented on the base of select pieces, create the appearance of darker shadows that flow throughout - celebrating the different shades of light seen on a grass court during the summer months.

Supporting the demands of grass court tennis, the collection has been crafted for added mobility, unlocked by adidas’ FreeLift Construction – which incorporates adaptive stretch areas under the arm of each garment, to offer players a greater range of motion.

To help players in the heat of the moment, the collection also includes adidas’ AEROREADY technology, which uses sweat-wicking or absorbent materials to keep players feeling dry. This combines with AIRCHILL for the AIRCHILL FreeLift T-Shirt Pro – an adidas technology that supports players feeling cool through thermally zoned, raised pattern motifs and mesh layers, helping to optimise airflow during high-intensity workouts and matches.

The collection premiers at the summer London tournaments and will be worn by athletes including Caroline Wozniacki, Elina Svitolina, Xinyu Wang, Dana Mathewson, Jessica Pegula, Maria Sakkari, Angelique Kerber, Camila Osorio, Daria Kasatkina, Stefanos Tsitsipas, Alexander Davidovich-Fokina, Felix Auger-Aliassime, Martin de la Puente, Francisco Cerundolo, Jakub Menšík, Alex Michelsen and Luca Nardi.

adidas and Arsenal reveal the new home kit for the 2024/25 season, that celebrates the rich heritage of The Gunners.

The club’s traditional colours of red and white with a slick navy addition, combine to create a modern looking design, that sees the cannon feature outside the crest on the home kit for the first time since the 1989/90 season. Previously seen on Arsenal away and third kits, the cannon represents an enduring symbol of Arsenal’s history which has been synonymous with the club since its inception.  

The new kit will be worn on pitch for the first time by Arsenal Women when they take on Brighton in the final match of the WSL season on Saturday May 18.

Major developments:

• Currency-neutral sales up 8% driven by growth in all regions except North America
• Double-digit DTC growth reflects strong adidas sell-through
• Gross margin improves 6.4pp to 51.2%, reflecting healthier inventory levels, reduced discounting, lower sourcing costs and a more favorable business mix
• Operating profit of € 336 million compared to € 60 million in the prior-year period
• Inventories down more than € 1.2 billion versus the prior year to € 4.4 billion
• Top- and bottom-line guidance upgraded on April 16 due to successful start to the year

Full-year outlook
adidas expects revenues to increase at a mid- to high-single-digit rate in 2024
On April 16, adidas upgraded its full-year financial guidance as a result of the better-than-expected performance in the first quarter. adidas now expects currency-neutral revenues to increase at a mid- to high-single-digit rate in 2024 (previously: increase at a mid-single-digit rate). Within this guidance, it is assumed that the remaining Yeezy inventory will be sold on average at cost, resulting in sales of around € 200 million throughout the remainder of the year. This corresponds to a projected total amount of Yeezy-related sales of around € 350 million in FY 2024 (previously: around € 250 million), of which around € 150 million were generated in the first quarter. For its underlying business, adidas remains focused on scaling its successful franchises, introducing new ones, and leveraging its significantly better, broader, and deeper product range. Improved retailer relationships, more impactful marketing initiatives, and the company’s activities around major sports events are also expected to contribute to sales increases throughout 2024.

Outlook impacted by significant currency headwinds
Unfavorable currency effects are projected to weigh significantly on the company’s profitability in 2024. They are expected to continue to adversely impact both reported revenues and the gross margin development in the remainder of the year.

Operating profit of around € 700 million projected
Following the better-than-expected performance in the first quarter, the company also increased its full-year profit guidance on April 16. The company’s operating profit is now expected to reach a level of around € 700 million (previously: to reach a level of around € 500 million). The improved bottom-line guidance includes a contribution of around € 50 million from Yeezy (previously: no Yeezy contribution) related to the drop in Q1. The sale of the remaining Yeezy inventory is assumed to result in no further profit contribution during the remainder of the year.

adidas unveils the team kits that will be worn at the upcoming Paris 2024 Olympic and Paralympic Games. With one central design story, all adidas teams and athletes are united under a design DNA that celebrates the unique identities of each nation.

All athletes share a passion for their sport, but this internal fire burns brightest around major international tournaments. In Paris, adidas will capture the flame that burns within every athlete through impactful fonts and detailed graphics – that feature across all apparel created for its 15 officially sponsored teams. To express the fire within athletes, the kits’ graphics, typeface, and all over print use a repeated line pattern which is brought to life through pops of color

Beyond team kits, adidas’ offering extends to the 2024 athlete pack – a 49-strong footwear collection which equips athletes across 41 different disciplines – more than 20 of which may be seen during the field of play this summer.