TLDR
- Adidas guided 2026 operating profit at €2.3 billion, missing analyst consensus of €2.72 billion
- A combined €400 million hit from U.S. tariffs and currency headwinds is weighing on the outlook
- The stock dropped around 7–8% in Frankfurt trading following the announcement
- Full-year 2025 results were strong — operating profit rose 54% to €2.06 billion on record sales of €24.8 billion
- CEO Bjorn Gulden’s contract was extended to 2030, and Adidas proposed a 40% dividend increase to €2.80 per share
Adidas delivered a strong 2025, but investors are looking ahead — and they don’t love what they see.
The German sportswear company reported record full-year sales of €24.8 billion, up around 5%, with net income climbing 75% to €1.34 billion. Operating profit rose 54% to €2.06 billion, well above the €1.7–1.8 billion the company itself had guided at the start of last year.
Currency-neutral revenue grew 13%, with double-digit growth across all markets and sales channels. Gross margin improved 0.8 percentage points to 51.6%.
Q4 was also solid. Currency-neutral sales grew 11% to €6.1 billion, with direct-to-consumer delivering double-digit gains across all regions. Gross margin expanded 1 percentage point to 50.8%, and operating profit more than doubled to €164 million.
So why did the stock drop 7–8%?
It comes down to what happens next. Adidas guided 2026 operating profit at roughly €2.3 billion — below the Visible Alpha analyst consensus of €2.72 billion. RBC Capital Markets analyst Piral Dadhania described this as implying a 15% consensus earnings downgrade “at face value.”
Tariffs and Currency Take a Bite
The company flagged a combined €400 million headwind from U.S. tariffs and unfavorable foreign exchange movements. Adidas manufactures many of its products in Asian countries now subject to U.S. levies, leaving it more exposed than some peers. A stronger euro against the dollar has also eroded the value of overseas profits.
Deutsche Bank said the guidance for operating income and profit margins was “slightly weaker-than-expected.”
The implied operating margin for 2026 — roughly 8.5–8.8% — would miss Adidas’s own 10% mid-term target, according to RBC.
On the revenue side, Adidas guided for currency-neutral growth at a high-single-digit rate in 2026, adding around €2 billion in sales. North America and Greater China are expected to lead, with low-double-digit expansion in both regions.
Mid-Term Outlook Offers Some Comfort
Adidas also laid out a multi-year plan, guiding for high-single-digit revenue growth and mid-teens operating profit compound annual growth rate (CAGR) through 2026–2028.
Morgan Stanley noted this kind of mid-term guidance is “relatively rare” and said it helps “soften the blow” of the near-term miss. With the stock trading at around 13x 2026 earnings at the time of results, the bank viewed the broader outlook more constructively.
The company also proposed a 40% dividend increase to €2.80 per share — a nod to confidence in cash generation despite the near-term pressures.
CEO Bjorn Gulden’s contract was extended through 2030. RBC called this “reassuring,” crediting him with a deep understanding of the sport industry. Gulden, who took the helm in 2023 following the fallout from the Ye partnership, has consistently beaten the guidance he set at the start of each year.
Adidas also announced plans to appoint Nassef Sawiris as chairman.
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