adidas(US:ADDYY) Changjiang Securities·2025-08-04 23:30Investment Rating - The investment rating for the industry is "Positive" and maintained [6] Core Insights - In FY2025Q2 (April 1, 2025 - June 30, 2025), Adidas reported revenue of €5.95 billion, which was below the expected €6.21 billion, showing a year-on-year growth of 8% at constant exchange rates, and a 12% increase when excluding the impact of Yeezy. The net profit attributable to shareholders was €370 million, exceeding the expected €340 million, with a year-on-year increase of 95%. The gross margin improved by 0.9 percentage points to 51.7%, primarily due to better product discounting and reduced shipping costs [2][4] Summary by Sections Revenue Performance - Adidas achieved revenue of €5.95 billion in FY2025Q2, which was lower than the expected €6.21 billion, with a year-on-year growth of 8% at constant exchange rates and 12% when excluding Yeezy [2][4] - The company's net profit was €370 million, surpassing the expected €340 million, reflecting a year-on-year increase of 95% [2][4] Gross Margin and Costs - The gross margin increased by 0.9 percentage points to 51.7%, attributed to improved product discounting and lower shipping costs [2][4] Market Performance - In FY2025Q2, Adidas' revenue growth in Europe, North America, and Greater China was 7%, 15%, and 11% respectively, with all markets except Europe achieving double-digit growth [10] - Direct-to-Consumer (DTC) and wholesale channels grew by 3% and 11% year-on-year respectively, indicating overall positive channel performance [10] Inventory and Cost Impacts - The inventory level was €5.26 billion, up 16% year-on-year, maintaining a healthy status in line with revenue growth [10] - Tariff impacts resulted in a negative effect of several million euros, with an expected increase in sales costs of €200 million in H2 [10] Performance Guidance - The company maintained its full-year guidance, expecting high single-digit revenue growth at constant exchange rates for FY2025, with an operating profit forecast of €1.7 to €1.8 billion, below market expectations of €2 billion [10]