Adidas posted a second-quarter net profit increase thanks to positive momentum driven by footwear, and said it will continue to work to get the brand back on track.
The German shoe and sportswear company said it made net profit of 190 million euros ($205.5 million) for the second quarter, up from EUR84 million in the year-earlier period.
The company confirmed preliminary second-quarter figures on Wednesday, adding that net sales grew 8.9% to EUR5.82 billion. On a currency-neutral basis, revenue grew 11% on year.
Operating profit rose to EUR346 million from EUR176 million, with the remaining Yeezy inventory contributing around EUR50 million.
The company has been in transition ever since it ended in 2022 its lucrative contract with rapper Kanye West, known as Ye, which led to a significant hit to profitability. Adidas decided to sell the remaining Yeezy inventory rather than to write it off.
The company backed its recently-upgraded sales and earnings guidance for the current year. It expects currency-neutral revenue to increase at a high single-digit rate and targets roughly EUR1 billion in operating profit.
“The improved brand momentum with our consumer happened faster than we had expected,” Chief Executive Bjorn Gulden said.
Analysts pointed out that the company’s 2024 targets set out in January seemed low and left room for upgrades, a strategy consistent with the one it followed last year.
Adidas is confident of achieving its mid-term target of an earnings before interest and taxes margin of 10%.
Write to Andrea Figueras at andrea.figueras@wsj.com
