📈 Increased Marketing Spend
Adidas has increased its marketing spend by 15% in the second quarter of 2024. The company spent $781M on marketing, partly due to the 'You Got This' campaign. This campaign coincided with the Men's Euros and Copa América tournaments. Gulden, the CEO, noted the positive atmosphere and fan interest during these events. Marketing expenses rose to 12.1% of sales, and operating profit almost doubled to $382M compared to $194M last year.
👟 Strong Product Performance
Despite challenges, Adidas saw strong product performance in Q2. Footwear revenues increased by 17%, while apparel sales grew by 6%. Accessories sales declined by 8%. The company faced backlash for dropping Bella Hadid from a campaign but continued to see positive consumer reactions. "I am convinced we can bring Adidas back to be a very strong and healthy company," said Gulden.
📊 Sales and Revenue Insights
Adidas's wholesale business grew by 17% in Q2, with direct-to-consumer revenues up 4%. The DTC arm grew 21% when excluding Yeezy sales. However, eCommerce sales declined by 6% due to a smaller Yeezy business. For the first half of 2024, Adidas reported a 6% increase in revenues to $12.5B, with a 10% increase on a currency-neutral basis. Operating profit for the first half was $661M, up from $229M in 2023.
🔮 Future Outlook
Gulden is optimistic about Adidas's future performance. He mentioned improved sentiment for the brand globally and better sell-out numbers for both lifestyle and performance products. The company plans to continue growing in double digits and leverage this growth to improve profitability. "We see improved sentiment for the Adidas brand globally," Gulden said, highlighting the company's strategy to maintain brand equity while driving growth.
Do you think Adidas's marketing strategy will pay off?
