TLDR
- First-quarter operating profit reached €705 million, surpassing the €647 million analyst consensus by approximately €60 million
- Revenue expanded 14% on a currency-neutral basis, significantly exceeding the roughly 9% projection from analysts
- Greater China delivered 17% currency-neutral expansion, while Latin America posted a remarkable 26% surge
- Gross margin contracted to 51.1% from 52.1% year-over-year, pressured by foreign exchange volatility and U.S. import duties
- Management maintained its full-year outlook at approximately €2.3 billion in operating profit despite Q1 outperformance, citing tariff and currency risks
Adidas delivered robust first-quarter performance, with operating profit advancing 15.6% compared to the prior year to reach €705 million. The result exceeded the analyst consensus forecast of €647 million by nearly €60 million and outpaced Bernstein’s projection of €656 million.
Revenue totaled €6.6 billion, representing a 7% increase in euro terms. Adjusting for currency fluctuations, sales climbed 14% — substantially ahead of the roughly 9% consensus expectation.
Per-share earnings reached €2.70, comfortably exceeding the consensus estimate of €2.53.
Chief Executive Bjørn Gulden characterized the quarter as “very strong in the current environment,” highlighting robust consumer demand spanning multiple product categories and geographic markets.
Key Performance Drivers
Performance-oriented product categories delivered exceptional results, expanding 29% on a currency-neutral basis during the first quarter, accelerating from 27% growth in the final quarter of 2025. Football, running, and training segments all contributed meaningfully.
Apparel emerged as the standout performer, surging 31% currency-neutral to €2.4 billion in revenue. Footwear posted 4% growth, building on a strong 17% expansion in the comparable year-ago period.
Chief Financial Officer Harm Ohlmeyer highlighted the company’s strategic decision to accelerate World Cup merchandise shipments as a significant contributor to quarterly momentum. This tactical approach proved instrumental in achieving the 14% revenue growth rate.
The running segment received additional momentum from the London Marathon, where Kenyan athlete Sabastian Sawe made history as the first runner to complete an official race distance in under two hours — wearing Adidas footwear.
Direct-to-consumer channels expanded 22% on a currency-neutral basis. Digital commerce climbed 25%, while company-operated stores increased 19%. Wholesale distribution channels grew at a more moderate 8% pace.
Geographic Performance Analysis
Latin America led all geographic regions with impressive 26% currency-neutral growth. Japan and South Korea followed closely with 23% expansion, while Greater China posted 17% growth — significantly exceeding Bernstein’s 9% forecast by 800 basis points.
North America returned to double-digit expansion territory with 12% growth in constant currency terms, though foreign exchange translation reduced this to just 1% growth in euro-denominated results.
Europe, representing the company’s largest market with €2.09 billion in quarterly revenue, advanced 6%. Gulden acknowledged that certain Middle Eastern markets experienced sales declines attributable to geopolitical conflict involving Iran.
Gross margin compressed to 51.1% from 52.1% in the prior-year period. Currency headwinds and elevated U.S. tariff expenses more than neutralized benefits from improved full-price selling discipline and favorable product mix shifts.
Adidas calculated that the combined impact from tariff pressures and foreign exchange movements will reduce full-year 2026 operating profit by approximately €400 million, with the most pronounced effects concentrated in the first six months.
Notwithstanding the impressive first-quarter showing, Adidas left its full-year guidance intact. Management continues to project high-single-digit currency-neutral revenue growth and operating profit of roughly €2.3 billion for 2026 — approximately 5% below current analyst consensus forecasts.
The unchanged outlook implies a substantial deceleration throughout the balance of the year, with second through fourth quarter operating profit tracking considerably below prevailing Wall Street estimates.
Adidas separately disclosed plans for a share repurchase program of up to €1 billion during 2026.
Gulden expressed concern about escalating promotional activity in lifestyle footwear categories, emphasizing that disciplined inventory management with retail partners remains critical to preserving pricing integrity.
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