On July 30, German sportswear giant Adidas released its financial report for the first half of fiscal year 2025, ending June 30. Thanks to the strong performance of the Adidas brand (+14%), the group’s net sales increased by 7.3% year-on-year to €12.1 billion. Gross margin rose by 0.9 percentage points to 51.9%. Operating profit surged by 70% year-on-year to €1.2 billion, with an operating margin of 9.6%. Net income from continuing operations more than doubled to €811 million.
Key Financial Figures for H1 FY2025:
Adidas CEO Bjørn Gulden commented, “I am very happy and actually again proud of what our team has delivered in both the second quarter and first half of 2025. We have continuously grown double digits and we ended the first half year with growth of 14% for the adidas brand. We have been able to create brand heat, extend the lifecycle of existing franchises, created new franchises, extended the brand momentum also into apparel with a 17% growth in Q2, and we have seen strong growth across our Performance categories with Running leading in Q2 with more than 25% growth. The 12% growth for the adidas brand in Q2 and 14% growth for the first half year created enough leverage to almost deliver already now our mid-term target of a 10% EBIT margin. The 9.2% EBIT margin in Q2 and 9.6% for the first half is higher than we had initially planned and it is of course achieved due to increased revenue, a very strong gross margin and tighter cost control.”
During the earnings call, Gulden described Adidas’s FY2024–2025 goal as “transitioning from a better company to a great one,” with the ambition to become a “healthy company” by FY2026.
By Category:
Both footwear and apparel saw double-digit growth, underscoring the Adidas brand’s strong momentum. Excluding currency effects, the performance by category was as follows:
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Footwear: Sales revenue rose 16% year-on-year in H1 (+9% if last year’s baseline includes Yeezy inventory sales). Growth was in the double digits across Originals, sportswear, running, training, and high-performance basketball segments.
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Apparel: Revenue accelerated significantly, up 12%, with double-digit growth in Originals, sportswear, running, training, and outdoor lines.
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Accessories: Grew 8% in H1.
By Region:
All market comparisons below include Yeezy sales in last year’s baseline; excluding Yeezy, the Adidas brand achieved double-digit growth across all markets.
In Greater China, Adidas recorded strong performance, with currency-neutral net sales up 13% year-on-year. Growth was mainly driven by strong double-digit gains in the lifestyle segment, which includes sportswear and Originals. Performance product revenue also grew, supported by double-digit increases in training and outdoor categories, as well as growth in running.
Key figures for Greater China in H1 FY2025:
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Total sales: €1.83 billion, up 6% year-on-year (baseline includes Yeezy); currency-neutral growth was 8%.
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Gross margin increased by 1.7 percentage points to 54.5%, as reduced discounting and lower sourcing costs offset adverse currency movements.
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Operating expenses rose 12% to €520 million, reflecting increased marketing spend and operational management costs. Operating expenses as a percentage of sales rose by 1.5 percentage points to 28.2%.
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Operating profit grew 6% to €481 million, with the operating margin steady at 26.3%.
In the annual report, Gulden highlighted Adidas’s localized strategy tailored to different global markets:
“We still have a lot to improve and we are far away from having optimized our business model. We are convinced that being a global brand with a local mindset is the right strategy to be globally successful. Our vision is to hire, develop and retain the best people to run our business in the different markets, to be close to the consumer and the local culture, have the right products and the relevant marketing for each market. We have the ambition of becoming the leader in all markets except for North America, where we should first have the ambition to double our business. We will not be number one in all markets, but our local leaders should have that ambition and identify what is necessary in terms of products, marketing, organization and resources to achieve this. We in global management must then set the priorities and allocate the resources to the different markets accordingly. We feel the current global growth and the success in markets like Greater China, South Korea or Japan prove that our strategy works and that we are moving in the right direction!“
By Channel:
The Adidas brand also posted strong and broad-based growth across channels.
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Wholesale: Currency-neutral sales rose 16% year-on-year (+15% including Yeezy in the baseline).
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DTC (Direct-to-Consumer): Up 12% year-on-year on a currency-neutral basis (+4% including Yeezy). Within DTC:
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Own retail sales grew 11% (+10% including Yeezy).
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E-commerce sales increased by 13% (-3% including Yeezy).
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Outlook
Looking ahead to the full fiscal year 2025, Gulden stated:
“The year has started great for us and normally we would now be very bullish in our outlook for the full year. We feel the volatility and uncertainty in the world does not make this prudent. We still do not know what the final tariffs in the US will be. We have already had a negative impact in the double-digit euro millions in Q2 and the latest indications of tariffs will directly increase the cost of our products for the US with up to € 200 million during the rest of the year. We do also not know what the indirect impact on consumer demand will be should all these tariffs cause major inflation. I have seen that many companies have either removed their outlook fully or reduced it dramatically. We have decided to stay with our initial outlook for the full year and a guidance for an operating profit of between € 1.7 billion and € 1.8 billion. We currently feel confident to deliver it, but of course this might change – also upwards should headwinds be less than we currently assume. We will as always manage through this volatile environment and all the uncertainties as good as we can but always with the objective of strengthening the adidas brand and our company mid- and long-term. That is what adidas deserves!”
| Source: Official financial report, earnings call presentation
| Image Credit: Adidas official website
| Editor: LeZhi
