On Wednesday, Telsey Advisory Group maintained a Market Perform rating on Adidas AG (ETR:ADSGN) (ADS:GR) (OTC: ADDYY) with a price target of €185.00. Adidas (OTC:ADDYY)' fourth-quarter operating metrics were consistent with the company's earlier guidance from January 31, but earnings per share (EPS) fell short due to a lower tax rate.
Despite mixed regional performance, with strong results in Originals and China, North America lagged with a 21% decline. The company has made strides in reducing inventory levels, which decreased by 24% year-over-year.
Adidas reiterated its 2024 outlook, initially provided on January 31, forecasting high single-digit to double-digit growth in most regions. However, the company anticipates a mid-single-digit decline in North American sales for 2024.
Potential upside for the year may come from Yeezy sales, which are projected to impact earnings by approximately €500 million or a low single-digit percentage. Adidas proposed a steady dividend of €125 million, equivalent to €0.70 per share, mirroring the previous year's payout.
Looking ahead to 2025, Adidas plans to restore its dividend payout to 30%-50% of net income from continuing operations. The upcoming earnings call is expected to provide insights into various aspects of the business, including the 2024 product lineup, inventory details, ongoing Yeezy releases, wholesale order trends, gross margin factors, foreign exchange impacts, and marketing strategies.
The Telsey analyst indicated that their estimates and 12-month price target for Adidas are under review, pending further details that will emerge from the earnings call scheduled for 10:00 AM ET. The company's performance and strategic plans will be closely watched as it navigates through a challenging retail environment, particularly in the North American market.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.