Key Highlights
- First-quarter operating profit reached €705 million, surpassing the €647 million consensus by a significant margin
- Revenue on a currency-neutral basis expanded 14%, far exceeding the approximately 9% analyst projection
- Greater China delivered 17% currency-neutral growth; Latin America posted exceptional 26% expansion
- Gross margin declined to 51.1% from the prior year’s 52.1%, impacted by foreign exchange pressures and U.S. tariff costs
- Management maintained full-year operating profit guidance at approximately €2.3 billion amid tariff and currency volatility
Adidas delivered impressive first-quarter results, with operating profit advancing 15.6% year-over-year to €705 million. The figure exceeded analyst consensus of €647 million by approximately €60 million and surpassed Bernstein’s projection of €656 million.
The sportswear giant recorded net sales of €6.6 billion, representing a 7% increase in reported euro figures. When adjusted for currency fluctuations, sales expanded 14% — significantly ahead of the approximately 9% consensus projection.
Earnings per share reached €2.70, exceeding the consensus estimate of €2.53.
Chief Executive Bjørn Gulden described the results as “very strong in the current environment,” highlighting widespread demand spanning multiple categories and geographic regions.
Performance Drivers Behind the Results
Performance categories delivered outstanding results, expanding 29% on a currency-neutral basis during Q1, an acceleration from 27% growth in Q4 2025. Football, running, and training segments all made meaningful contributions.
Apparel emerged as the fastest-growing product segment, climbing 31% currency-neutral to €2.4 billion. Footwear expanded 4%, building on a robust 17% increase in the comparable quarter of the previous year.
Chief Financial Officer Harm Ohlmeyer highlighted the company’s strategic decision to accelerate World Cup inventory shipments as a significant contributor to quarterly performance. This approach enabled the company to achieve 14% growth.
The running category 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 — wearing Adidas footwear.
Direct-to-consumer channels generated 22% currency-neutral revenue growth. E-commerce channels expanded 25%, while company-owned retail locations grew 19%. Wholesale distribution channels posted more moderate 8% growth.
Geographic Performance Analysis
Latin America topped all regions with extraordinary 26% currency-neutral expansion. Japan and South Korea recorded 23% growth, while Greater China achieved 17% — substantially exceeding Bernstein’s 9% forecast by 800 basis points.
North America returned to double-digit expansion at 12% in constant currency terms, though foreign exchange effects limited reported euro growth to just 1%.
Europe, representing the largest revenue market at €2.09 billion, expanded 6%. Gulden acknowledged that certain Middle East markets experienced sales declines due to the Iran conflict.
Gross margin contracted to 51.1% from 52.1% in the year-ago period. Currency fluctuations and elevated U.S. tariff expenses outweighed benefits from full-price selling strategies and favorable product mix shifts.
Adidas calculated that the combined impact from tariffs and currency movements will reduce full-year 2026 operating profit by approximately €400 million, with the most significant effects concentrated in the first half.
Despite the robust first-quarter performance, Adidas maintained its full-year guidance. The company continues to project high-single-digit currency-neutral sales growth and operating profit of approximately €2.3 billion for 2026 — roughly 5% below analyst consensus expectations.
The unchanged guidance suggests a pronounced deceleration for the remaining quarters, with Q2–Q4 operating profit expected to run considerably below current analyst estimates.
Adidas also revealed a share repurchase program of up to €1 billion scheduled for 2026.
Gulden identified increasing promotional activity in lifestyle footwear as a potential challenge, emphasizing that careful management of product distribution to retail partners remains essential for preserving pricing power.
