Adidas jumps 5% after second outlook hike, strong Q2
4:25 am Wednesday, July 17th, 2024
(Reuters) -Adidas shares jumped as much as 5% on Wednesday, hitting their highest in over two years, after the German sportswear company hiked its full-year guidance for the second time this year, having beaten expectations with its second-quarter results on Tuesday.
“We see the strength in 2Q24 still led by terrace Originals franchises — Samba and Gazelle — which we increasingly see on US consumers,” analysts at Telsey Advisory Group wrote in a note to clients.
They anticipate that momentum for the brand can continue throughout the second half of this year and into 2025, helped by dampening demand in the past few months for some of competitor Nike’s key lifestyle franchises, such as Air Force 1 and Air Jordan 1.
The popularity of the company’s low-rise multi-coloured ‘terrace’ sneakers, along with weaker sales at rival Nike, had been expected to help Adidas deliver strong second-quarter sales.
“Near term, I guess the issue is how much more can they raise guidance during 2H,” said Simon Irwin, retail and sporting goods analyst at Tanyard Advisory.
Further out, it remains to be seen how much longer can the ‘terrace’ trend continue and whether Adidas can transition into what comes next, such as ‘retro running’ and ‘low profile’ lines, Irwin added.
Shares were up to 239 euros at 08:15 GMT, set for their largest-one day rise in three months and on track for a 30% gain so far this year.
Rival Puma rose as much as 2.8%.
(Reporting by Linda Pasquini, additional reporting by Helen Reid; Editing by Amanda Cooper)
