Shares in Adidas (ADSGn.DE) surged over 8% on Wednesday, reaching their highest level in more than two years after the company reported strong quarterly results and raised its 2024 guidance.

Analysts at Wedbush attributed the growth to high demand for retro styles like Samba, Gazelle, and Campus, as well as robust performance in other categories. Stifel analyst Cedric Lecasble noted the guidance increase was driven by Adidas brand building, not by Yeezy sales mechanics.

Bjorn Gulden
Adidas CEO, Bjørn Gulden, led Adidas’ revival despite a previous debacle with Kanye West

Under CEO Bjorn Gulden, Adidas resumed Yeezy sales to clear remaining stock while boosting retro style popularity. Lecasble described the first quarter revenue as “impressive,” with Telsey Advisory Group noting growth excluding Yeezy sales indicated higher full-price selling and less promotional activity.

All regions, including North America, showed positive results, with Wedbush highlighting inventory improvement as brand popularity grew. However, analysts considered Adidas’ 700 million euro operating profit (EBIT) guidance conservative, with RBC analyst Piral Dadhania noting market consensus at around 890 million euros for 2024. Quarterly EBIT was 336 million euros.

Adidas sold 150 million euros worth of Yeezy products last quarter, generating about 50 million euros in profit, but expects no further profits from the remaining Yeezy inventory, estimated at 200 million euros.

Shares rose 8.2% by 1107 GMT, leading the pan-European STOXX 600 (.STOXX).