Adidas Boosts Samba and Gazelle Production Amid Surging Demand

Adidas reports strong Q1 2024 earnings, driven by surging sales of its iconic Samba and Gazelle sneakers. The company's Lifestyle business, particularly the Originals footwear category, sees significant growth, with new franchises like SL72 gaining popularity.

Aqsa Younas Rana
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Adidas Boosts Samba and Gazelle Production Amid Surging Demand

Adidas Boosts Samba and Gazelle Production Amid Surging Demand

Adidas AG has significantly ramped up production of its iconic Samba and Gazelle sneakers, with sales skyrocketing from hundreds of thousands to millions of pairs per month. The German sportswear giant's data, among consumer demand for the classic footwear franchises continues to soar. Adidas CEO Bjorn Gulden highlighted the strong performance of the company's Lifestyle business, particularly the Originals footwear category, during the Q1 2024 earnings call.

"The demand for our footwear franchises, including Samba, Gazelle, Spezial, and Campus, remains strong and growing," Gulden stated. "New franchises like SL72 are also starting to become high in demand." The surge in popularity of the Samba and Gazelle lines has been a bright spot for Adidas, which reported better-than-expected results for the first quarter of 2024. The company achieved currency-neutral revenue growth of 8% compared to the prior year, with the gross margin reaching an impressive 51.2%, up 640 basis points.

The Samba and Gazelle sneakers have been staples in Adidas' product lineup for decades, with their timeless designs and versatile appeal. The Samba, originally designed as an indoor soccer shoe, has become a cultural icon since its introduction in 1949. The Gazelle, first released in 1966, has also gained a devoted following for its sleek silhouette and comfortable fit. Adidas' success with these classic sneakers can be attributed to the company's ability to leverage its rich heritage while staying attuned to current fashion trends.

Collaborations with high-profile designers and celebrities have further elevated the sneakers' cultural cachet. Most recently, Chinese designer Dingyun Zhang, known for his work with Yeezy, partnered with Adidas to create a limited-edition Samba design. The Dingyun Zhang x Adidas Samba, released on May 10, features an all-black color scheme with a patent leather base, suede toe box, and a puffed-up collar inspired by 2000s skateboarding shoes.

"As a designer I'm dedicated to creating newness, from scratch," Zhang said in a press release. "This shoe is all about demonstrating that highly conceptual ideas can be stretched into an all-new physical silhouette." Zhang drew inspiration from his school days, when he had to black-out his Sambas to conform to dress codes. He also spent time in Adidas' archives in Beijing and Herzogenaurach, Germany, studying source material, including the Predator Absolute cleat from 2006.

As Adidas continues to ride the wave of demand for its Samba and Gazelle sneakers, the company remains focused on maintaining brand momentum and driving growth. Gulden emphasized the importance of managing inventories effectively, stating, "This is the underlying thing that can support both our growth with fresh inventory where we can have good sell-through. And of course, it was extremely important for our gross margin." Inventories were reduced by 1.2 billion to 4.4 billion, supporting growth with fresh inventory and contributing to the improved gross margin.

With a strong pipeline of products lined up for the coming quarters and a focus on the summer of sports, Adidas is well-positioned to capitalize on the enduring appeal of its classic sneakers while continuing to innovate and collaborate with visionary designers. Samba and Gazelle continue to dominate sales, it's clear that these timeless silhouettes will remain an integral part of Adidas' success story for years to come. "I think the image on the screen is an important one." It shows both the men and the female team of Real Madrid playing in the Y-3 Yamamoto design, and I think that mirrors a little bit of what we are trying to do tomove, planet, back, activity,"Gulden stated during the earnings call, underscoring Adidas' commitment to blending fashion and performance.

Key Takeaways

  • Adidas' Samba and Gazelle sneakers see massive sales growth, from hundreds of thousands to millions per month.
  • CEO Bjorn Gulden highlights strong performance of Lifestyle business, particularly Originals footwear category.
  • Adidas reports 8% currency-neutral revenue growth and 51.2% gross margin in Q1 2024.
  • Collaborations with designers and celebrities elevate sneakers' cultural appeal.
  • Adidas focuses on managing inventories and driving growth with fresh products and summer sports initiatives.