TLDR
- First-quarter operating profit jumped 15.6% to €705 million, exceeding the €647 million consensus
- Revenue on a currency-neutral basis expanded 14%, significantly outpacing the anticipated ~9%
- Greater China posted 17% currency-neutral growth; Latin America skyrocketed 26%
- Gross margin contracted to 51.1% from 52.1%, pressured by currency fluctuations and U.S. tariff impacts
- Annual outlook maintained at approximately €2.3 billion operating profit amid tariff and foreign exchange volatility
Adidas delivered robust first-quarter results, with operating profit surging 15.6% year-over-year to reach €705 million. This figure exceeded Wall Street’s consensus projection of €647 million by approximately €60 million and outperformed Bernstein’s €656 million forecast.
Revenue totaled €6.6 billion, representing a 7% increase in reported euro terms. When adjusted for currency fluctuations, the sales figure showed a remarkable 14% expansion — substantially higher than the roughly 9% consensus expectation.
The sportswear giant reported earnings per share of €2.70, surpassing analyst expectations of €2.53.
Chief Executive Bjørn Gulden characterized the performance as “very strong in the current environment,” highlighting widespread demand across product categories and geographic markets.
Key Performance Drivers
Performance segments spearheaded growth, expanding 29% on a currency-neutral basis during Q1, accelerating from 27% in the fourth quarter of 2025. Football, running, and training lines all delivered solid contributions.
Apparel emerged as the fastest-expanding product segment, climbing 31% currency-neutral to €2.4 billion. Footwear revenue increased 4%, building on a strong 17% gain during the comparable period last year.
Chief Financial Officer Harm Ohlmeyer highlighted the company’s strategic decision to advance World Cup inventory shipments as a significant catalyst for the quarter. This tactical approach enabled the company to achieve 14% growth momentum.
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 in under two hours — while wearing Adidas footwear.
Direct-to-consumer channels recorded 22% currency-neutral growth. Digital commerce climbed 25%, while company-owned retail locations increased 19%. Wholesale distribution channels registered more moderate 8% growth.
Geographic Performance
Latin America dominated regional performance with 26% currency-neutral expansion. Japan and South Korea followed closely with 23% growth, while Greater China delivered 17% — substantially exceeding Bernstein’s 9% projection by 800 basis points.
North America returned to double-digit expansion at 12% in constant currency terms, although this translated to merely 1% growth in euro-denominated revenue due to foreign exchange headwinds.
Europe, representing the company’s largest regional market with €2.09 billion in revenue, posted 6% growth. Gulden observed that certain Middle Eastern markets experienced revenue declines attributed to the Iran conflict.
Gross margin decreased to 51.1%, down from 52.1% in the prior-year period. Currency movements and elevated U.S. tariff expenses more than neutralized improvements from full-price selling strategies and enhanced product mix.
Adidas estimates the combined impact from tariffs and currency headwinds will reduce full-year 2026 operating profit by approximately €400 million, with the most significant effects concentrated in the first half.
Notwithstanding the impressive Q1 performance, Adidas maintained its full-year guidance without adjustment. The company 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.
The unchanged guidance suggests a considerable deceleration throughout the remainder of the year, with Q2–Q4 operating profit trending well beneath existing projections.
Adidas additionally unveiled a share repurchase program of up to €1 billion for 2026.
Gulden expressed concern regarding escalating discounts in the lifestyle footwear segment, emphasizing that effective management of product distribution to retail partners remains critical for maintaining pricing integrity.
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