Adidas AG Shares Jump After Strong Q1 Earnings Beat
Shares of Adidas AG climbed more than 6% on Wednesday after the company reported first-quarter results that exceeded expectations across key metrics. Despite the strong performance, Adidas kept its full-year outlook unchanged, reflecting caution over U.S. tariffs and currency pressures.
Profit and Sales Outperform Expectations
Operating profit (EBIT) rose 15.6% year-on-year to €705 million, surpassing both analyst estimates and market consensus. The operating margin improved to 10.7%, beating expectations of around 10.3%.
Currency-neutral sales increased 14%, significantly outperforming forecasts near 9%. Reported net sales reached €6.59 billion, up 7.1%, also ahead of expectations.
Earnings per share came in at €2.70, exceeding the consensus estimate of €2.53.
Broad-Based Growth Across Categories
Growth was driven by strong performance across multiple segments. Performance categories led the way, with 29% growth, supported by demand in football, running, and training products.
Lifestyle products also improved, rising 6%, up from 3% growth in the previous quarter.
By product category:
- Apparel surged 31%
- Accessories grew 13%
- Footwear increased 4%, building on strong prior-year growth
Direct-to-Consumer and E-Commerce Lead Expansion
Direct-to-consumer (DTC) sales significantly outpaced wholesale channels, rising 22% on a currency-neutral basis. E-commerce sales jumped 25%, while company-owned retail stores grew 19%.
Wholesale revenue increased 8%, constrained by cautious inventory strategies in Europe and North America, as well as tough comparisons with last year’s strong growth.
China and Emerging Markets Drive Regional Growth
Greater China stood out as the strongest region, with 17% currency-neutral growth, far exceeding expectations. Other regions also posted strong gains, including:
- Latin America: +26%
- Japan and South Korea: +23%
North America returned to double-digit growth at 12%, while Europe—Adidas’ largest market—grew a more modest 6%.
Margin Pressure from Currency and Tariffs
Despite strong revenue growth, gross margin declined to 51.1%, impacted by unfavorable foreign exchange movements and higher tariffs. These factors offset improvements from pricing and product mix.
Full-Year Outlook Reflects Caution
Adidas maintained its 2026 guidance, projecting high single-digit sales growth on a currency-neutral basis and operating profit of approximately €2.3 billion. This remains slightly below analyst expectations, indicating a more cautious outlook for the remainder of the year.
The company highlighted potential headwinds of around €400 million, driven by tariffs and currency fluctuations.
Share Buyback Program Announced
In addition to its earnings update, Adidas announced a share buyback program of up to €1 billion for 2026, signaling confidence in its long-term strategy despite near-term uncertainties.
