Shares in Adidas (ETR:ADS) plunged in Frankfurt after the German sportswear giant’s Q2 earnings missed expectations.
Adidas pinned the blame on higher marketing spending around this summer’s FIFA World Cup, as CEO Bjorn Gulden sought to outcompete US sportswear rival Nike (NYSE:NKE).
| Share price: €150.3 (-17.4%) | Market cap: €31.7bn |
| PE FY26: 9.1 | Yield FY26: 2% |
The Gazelle and Samba sneaker maker also set nerves jangling with the news long-serving CFO Harm Ohlmeyer will leave when his contract expires at the end of the year.
Ohlmeyer’s replacement is Birgit Kretschm, who is rejoining Adidas from clothing retailer C&A.
Q2 miss
While Adidas’ net profit from continuing operations grew 6% year-on-year to €398 million, this was shy of the €430 million analysts were calling for. Adidas’ marketing expenditure was €212 million higher than the previous year due to increased spending on World Cup campaigns.
The earnings miss overshadowed record Q2 revenue from Adidas, up 14% in constant currency to €6.7 billion.
Adidas also raised its FY26 top-line outlook, with revenues now expected to grow between 9% and 10%, up from previous guidance for high-single digit growth. Operating profit is still expected to increase to around €2.3 billion.
World Cup fairy tale
Gulden commented: ‘This World Cup was like a fairy tale for me! I am so proud of what our teams around the world achieved. I do not think we could have scripted it better. Our marketing campaign Backyard Legends brought back the love for the game the way we used to play it in the streets. The products with jerseys, culture wear, footwear and balls showcased what adidas football should look like and we also sold much more than ever before.’
Gulden added: ‘Seeing two of our teams, Argentina with Messi and Spain with Lamine Yamal, playing the final was unbelievable. That they played with our adidas Trionda ball and that also the referees for the first time in history wore Three Stripes came on top.’
Adidas’ shares have halved in value over the past five years amid concerns over weak consumer spending, tariffs and competition from upstart rivals and a resurgent Nike. While the Q2 earnings miss is a setback, there was enough in today’s update to keep recovery investors interested.
Adidas delivered impressive direct to consumer growth of 25% in Q2, with double-digit increases in all markets. This reflected strong consumer demand and product sell-through around the world.
Furthermore, Q2 gross margin increased 0.8 percentage points to 52.5% thanks to healthy full-price sales and a more favourable channel mix. In addition, the company received the first small refund of previously paid US tariffs. We will continue to monitor progress with the turnaround.
Read the press release here: https://www.adidas-group.com/en/investors
