TLDR
- Adidas projected 2026 operating profit of €2.3 billion, falling short of the €2.72 billion analyst estimate
- U.S. tariffs and foreign exchange pressures are expected to create a €400 million negative impact
- Shares plunged approximately 7–8% during Frankfurt trading after the guidance release
- 2025 annual performance exceeded expectations — operating profit jumped 54% to €2.06 billion with sales reaching a record €24.8 billion
- Bjorn Gulden’s CEO tenure was extended until 2030, while shareholders will vote on a 40% dividend hike to €2.80 per share
Adidas posted impressive 2025 numbers, but the market’s focus has shifted forward — and the view isn’t encouraging investors.
The German athletic apparel giant announced record annual revenue of €24.8 billion, representing approximately 5% growth, while net income surged 75% to €1.34 billion. Operating profit jumped 54% to reach €2.06 billion, comfortably exceeding the company’s own €1.7–1.8 billion projection from early last year.
On a currency-neutral basis, revenue expanded 13%, with double-digit increases seen across every market and distribution channel. The company’s gross margin widened by 0.8 percentage points to reach 51.6%.
Fourth-quarter performance was equally impressive. Currency-neutral revenue climbed 11% to €6.1 billion, with direct-to-consumer channels posting double-digit increases in every geographic region. Gross margin expanded 1 percentage point to 50.8%, while operating profit more than doubled to €164 million.
So what triggered the 7–8% share price decline?
The answer lies in forward projections. Adidas forecast 2026 operating profit at approximately €2.3 billion — significantly below the Visible Alpha analyst consensus estimate of €2.72 billion. RBC Capital Markets analyst Piral Dadhania characterized this as suggesting a 15% downward revision to consensus earnings expectations “at face value.”
Tariff and FX Pressures Mount
The company identified a collective €400 million obstacle stemming from U.S. import tariffs and adverse currency fluctuations. Since Adidas produces a significant portion of its goods in Asian nations now facing U.S. import duties, it faces greater exposure compared to certain competitors. Additionally, a strengthening euro relative to the dollar has diminished the value of international earnings.
Deutsche Bank characterized the operating income and margin guidance as “slightly weaker-than-expected.”
The projected operating margin for 2026 — approximately 8.5–8.8% — would fall below Adidas’s own medium-term objective of 10%, according to RBC’s analysis.
Regarding top-line growth, Adidas forecast currency-neutral revenue expansion in the high-single-digit percentage range for 2026, translating to roughly €2 billion in additional sales. North America and Greater China are anticipated to drive growth, with low-double-digit percentage increases expected in both territories.
Multi-Year Forecast Provides Some Relief
Adidas simultaneously unveiled longer-term projections, forecasting high-single-digit revenue growth and mid-teens operating profit compound annual growth rate (CAGR) spanning 2026–2028.
Morgan Stanley observed that this type of extended guidance is “relatively rare” and suggested it helps “soften the blow” of the near-term disappointment. With shares trading at approximately 13x 2026 earnings when results were published, the investment bank expressed a more constructive view of the extended outlook.
The company also recommended a 40% dividend increase to €2.80 per share — signaling management’s confidence in cash flow generation despite short-term headwinds.
CEO Bjorn Gulden’s employment agreement was extended through 2030. RBC described this as “reassuring,” highlighting his comprehensive knowledge of the sporting goods industry. Gulden, who assumed leadership in 2023 following the controversy surrounding the Ye collaboration, has consistently exceeded his initial annual guidance targets.
Adidas also revealed intentions to appoint Nassef Sawiris as chairman.
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