Sportswear giant Adidas drops 8% after profit guidance disappoints
The Adidas logo is seen on the Gazelle sneakers, which went on sale at a store in Berlin, Germany, on May 2, 2024.
Lisi Niesner | Reuters
shares adidas It fell as much as 8% on Wednesday after providing a disappointing 2026 outlook as it grapples with unfavorable currency swings and a hit from U.S. tariffs.
The German sportswear company expects high-single-digit revenue growth in 2026, compared to a total of 24.8 billion euros ($28.86 billion) in 2025.
Despite the negative impact of 400 million euros from US tariffs and negative developments in foreign exchange, operating profit is expected to increase to approximately 2.3 billion euros.
Analysts at RBC Capital Markets said investors would be “disappointed” as the profitability outlook was 15% below overall expectations. “The big question will be how conservative the EBITDA guidance will be, given Adidas’s conservative approach at the start of the year,” they added.
Jefferies analyst James Grzinic said the expected 9% margin on operating profit of 2.3 billion euros was far from expectations.
Fourth-quarter sales and profit slightly missed the target of 6.1 billion euros and 164 million euros, respectively, in constant currencies, according to FactSet estimates.
“Despite all the external turmoil in the fourth quarter, achieving double-digit growth and more than doubling our operating profit in the quarter made for a very good year-end,” said Adidas CEO Bjørn Gulden.
Adidas also presented its mid-term goals on Wednesday; It sees currency-neutral sales growing at a high-single-digit rate in 2026-2028, with operating profit growing at an annual growth rate in the mid-teens over that period.
Adidas’ shares last hit their 52-week low, down 6.7%.
Adidas shares have nearly halved in the past year.
Adidas shares were down nearly 43% over the past 12 months as investors remained skeptical about Adidas’ future as it entered trading Wednesday.
The growth prospects of the global sportswear industry, characterized by oversupply in China and changing consumer preferences, represent another pressure point for investors.
country wife Puma and larger US rival Nike they have faced similar adversity and are also in the midst of a comeback. In October, Nike’s CEO told CNBC that it would “take some time” for the company to return to profitable growth.
On Wednesday, Adidas also extended CEO Gulden’s contract until 2030, clearly demonstrating confidence in its strategy.
Gulden took the reins in 2023 to stabilize the company after his split with rapper Ye, formerly known as Kanye West, over anti-Semitic comments triggered a crisis for Adidas, which relied on sales of its Yeezy sneaker line.
