Adidas shares plunged a record 19% on Thursday after the German sportswear giant reported lower-than-expected quarterly profit, overshadowing stronger sales and an upgraded revenue outlook driven by demand for retro footwear and the FIFA World Cup.
The company now expects currency-neutral revenue to grow between 9% and 10% in 2026, up from its previous forecast of high-single-digit growth.
Second-quarter revenue rose 14% on a currency-neutral basis to €6.74 billion, beating analysts' expectations of €6.63 billion. However, operating profit increased just 5% to €574 million, falling short of the consensus forecast of €623 million as marketing expenses surged during the World Cup.
Chief Executive Bjørn Gulden said the company intentionally prioritised long-term growth over short-term profitability by investing heavily in innovation, partnerships and brand visibility.
"We're investing in innovation, partnerships and visibility. That's why we've gained market share," Gulden said, adding that Adidas was not trying to maximise earnings simply to satisfy investors.
Marketing costs overshadow strong sales
Analysts said investor expectations had risen sharply ahead of the earnings release following strong World Cup-related demand, making the profit miss more significant despite the improved sales outlook.
Deutsche Bank described the results as a "good quarter" but noted that implied second-half sales growth appeared weaker than expected after Adidas increased marketing spending by around 30%.
Analysts at Citi also said the revised revenue guidance remained below market expectations, raising concerns about whether Adidas can maintain its growth momentum once World Cup-related demand eases.
Competition remains intense
Adidas continues to expand its footwear portfolio as demand for its popular Samba and Gazelle sneakers gradually moderates while competition intensifies, particularly from rival Nike.
Despite the weaker-than-expected profit, the company maintained its full-year operating profit forecast of €2.3 billion.
Adidas also announced that Birgit Kretschmer will succeed Harm Ohlmeyer as chief financial officer at the end of the year after Ohlmeyer decided not to seek another term.
Despite Thursday's sharp sell-off, Adidas remains one of Europe's most closely watched retail stocks, although its shares are now down nearly 12% since the start of the year.
