2024 was a year full of highlights for Adidas. The company delivered an impressive performance: global revenue grew 12% year-on-year (at constant exchange rates), operating profit increased significantly, and gross profit margin improved. Greater China was particularly impressive, with revenue returning to double-digit growth.
However, a broader perspective reveals that this resurgence isn’t a resurgence after a desperate situation, but rather a phased response within a complex landscape. To understand whether Adidas can truly return to its peak, we need to carefully examine the situation from multiple perspectives, including global competition, regional market differences, product strategy, and supply chain risks.
1. Global revenue and profit recovery: the tip of the glacier is showing
Adidas’ performance in the fourth quarter of 2024 was quite solid, with double-digit sales growth in Europe, Greater China, Latin America, and emerging markets in Asia. Wholesale and direct-to-consumer (DTC) channels also saw strong growth, demonstrating a comprehensive recovery across multiple regions.
Full-year operating profit increased by over €1 billion compared to the previous year, with operating margins significantly recovering from their low levels. In footwear, Originals, Football, and Training collections were the primary drivers of growth. While apparel saw modest growth, it also demonstrated positive momentum through product mix optimization and discounting.
The North American market remains a tough nut to crack
. North America has always been a challenging area for Adidas. In 2023, Adidas reported a year-on-year loss due to the termination of its partnership with Kanye West (Ye) and the liquidation of Yeezy inventory. Although North America achieved double-digit growth in the fourth quarter of 2024, progress for the full year remained cautious. Worse still, if the US imposes tariffs on imported goods or escalates trade barriers, costs and selling prices could be significantly squeezed.
2. Competing with competitors: Nike, Puma, and emerging brands
Nike: Undercurrents of Weakness.
In 2024, Nike appears to be struggling with sluggish growth, channel adjustments, and a slowing digital business. Some analysts point to its over-investment in online channels, which is now facing a pullback due to inventory pressure, and the recovery of the Chinese market also faces challenges. In contrast, Adidas has capitalized on retro trends (such as the return of Samba and Gazelle), resulting in rapid growth in mass-market sales.
Puma and emerging brands are competing
against each other. Puma’s performance has been disappointing, while emerging sports brands (On Running, Hoka, and local running shoe brands) are catching up in the performance shoe market. If Adidas does not continue to innovate in the performance running shoe market, it may lose market share.
Furthermore, global consumer preferences for sports and fashion are constantly evolving. Relying solely on hit products is no longer enough; multi-dimensional developments, including design, culture, and cross-border collaborations, are the key to long-term success.
3. Regional market differences: East Asia, Europe, and emerging markets
China: A Peak That Can’t Be Returned.
China was once Adidas’ primary market, but the Xinjiang cotton controversy triggered a strong backlash in 2021, pushing its market share down to single digits. While Greater China revenue returned to double-digit growth in 2024, this represented more of a recovery phase than a full-blown comeback. Compliance risks and digital business regulation also pose concerns for Adidas’ return to its home market.
Emerging Markets and Latin America: There are both potential and risks in emerging markets like Latin America, Southeast Asia, and India. Adidas has strong growth momentum, and these regions, with their large young consumer base and enormous potential, are key players in its future global expansion. However, emerging markets also face exchange rate fluctuations, tariff barriers, imperfect logistics, counterfeiting, and channel management issues, creating uncertain profit margins.
4. Product strategy and brand positioning
Hot Products vs. Long-Term Brand Equity:
Adidas used to rely on hits like NMD, Yeezy, and Stan Smith, but these hits can be highly volatile. In 2024, Adidas began adjusting its product strategy:
Increase the proportion of classic models (Samba, Gazelle, Trefoil series) and consolidate the original style (Originals) line.
Launch regionalized and market-customized products to better suit local consumer preferences.
Reduce reliance on promotional methods to improve gross profit margins and brand control.
However, strategic adjustments take time, and competitors are also accelerating to catch up.
Supply chain and compliance risks:
Adidas products are primarily produced in Vietnam, Indonesia, and China, making them extremely sensitive to trade barriers, tariffs, and national regulations. Compliance and corruption allegations in the Chinese market have also caused Adidas’ stock price to decline. This serves as a reminder that global brands must maintain a high level of sensitivity to geopolitics, compliance, and governance.
5. Can it return to its peak? Key judgment points in the future
North American market : Can it achieve truly stable growth?
Chinese market : Can the restoration of trust continue?
New products and brand symbols : Classic models provide the foundation, while future growth requires new cultural symbols or technological breakthroughs.
Cost, trade policy and compliance capabilities : How to prevent and control globalization risks?
Profit margins and cash flow : Revenues are recovering, but are profit margins and inventory management stable?
Summarize
Adidas is in the midst of a resurgence. While its 2024 rebound will undoubtedly be a strong one, whether it can truly return to its former glory depends on its strategy over the next five years. Adidas’s long-term success will depend on whether it can achieve a “triple advantage” in North America, China, and emerging markets, whether it can find a new balance between product innovation and brand identity, and whether its global governance and cost control capabilities are robust.
Simply put, this is not a story that can be concluded in an annual report, but a long-term “endurance race”.
