Key Highlights
- Operating profit reached €705 million in Q1, up 15.6% year-over-year and surpassing the €647 million consensus
- Revenue grew 14% on a currency-neutral basis, significantly exceeding analyst projections of ~9%
- Greater China delivered 17% currency-neutral growth; Latin America jumped 26%
- Gross margin declined to 51.1% from 52.1%, impacted by FX headwinds and elevated U.S. tariff costs
- Management maintained 2026 guidance at roughly €2.3 billion operating profit amid tariff and currency volatility
The German sportswear manufacturer delivered an impressive first-quarter performance, with operating profit rising 15.6% from the prior year to reach €705 million. The figure exceeded Wall Street’s consensus forecast of €647 million by approximately €60 million and surpassed Bernstein’s projection of €656 million.
Revenue totaled €6.6 billion for the quarter, marking a 7% increase in reported terms. When adjusting for currency fluctuations, the company achieved 14% sales growth — substantially outpacing the ~9% analyst consensus.
The company reported earnings per share of €2.70, exceeding expectations of €2.53.
Chief Executive Bjørn Gulden described the quarter as “very strong in the current environment,” highlighting robust consumer demand spanning multiple product categories and geographic markets.
Performance Drivers Behind the Outperformance
The performance segment delivered exceptional results, registering 29% currency-neutral growth during the first quarter, an acceleration from the 27% expansion recorded in Q4 2025. Football, running, and training categories all contributed to this momentum.
Apparel emerged as the standout product category, surging 31% on a currency-neutral basis to generate €2.4 billion in revenue. Footwear increased 4%, building on the impressive 17% growth achieved in the comparable quarter last year.
Chief Financial Officer Harm Ohlmeyer highlighted the company’s strategic decision to accelerate World Cup merchandise shipments as a significant contributor to quarterly performance. This tactical approach enabled the company to achieve its robust 14% 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 marathon in under two hours — while wearing Adidas footwear.
Direct-to-consumer channels posted 22% currency-neutral growth. Online sales climbed 25%, while company-owned retail locations increased 19%. Wholesale distribution channels recorded more moderate growth of 8%.
Geographic Performance Analysis
Latin America topped regional performance with outstanding 26% currency-neutral expansion. Japan and South Korea combined achieved 23% growth, while Greater China delivered 17% — significantly exceeding Bernstein’s 9% forecast by 800 basis points.
North America reversed course with 12% constant-currency growth, marking a return to double-digit expansion, though unfavorable exchange rates compressed this to just 1% growth in euro-denominated terms.
Europe, representing the company’s largest market at €2.09 billion in revenue, posted 6% growth. Gulden acknowledged that certain Middle Eastern territories experienced declining sales due to the ongoing Iran conflict.
Gross margin contracted to 51.1% from 52.1% in the year-ago period. Currency fluctuations combined with increased U.S. tariff expenses outweighed improvements from premium pricing strategies and favorable product mix shifts.
Management estimates the combined impact from tariffs and foreign exchange movements will reduce full-year 2026 operating profit by approximately €400 million, with the most significant pressure concentrated in the first half.
Notwithstanding the robust first-quarter results, Adidas preserved its full-year outlook without adjustment. The company continues to project high-single-digit currency-neutral revenue growth and operating profit near €2.3 billion for 2026 — roughly 5% below Wall Street consensus estimates.
The unchanged guidance suggests a considerable deceleration through the balance of the year, with Q2–Q4 operating profit tracking well beneath current analyst projections.
The company simultaneously unveiled a share repurchase program valued at up to €1 billion throughout 2026.
Gulden expressed concern regarding increasing promotional activity in the lifestyle footwear segment, emphasizing that disciplined inventory management with retail partners remains critical to maintaining pricing integrity.
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