Adidas shares dropped as much as 8% on Wednesday after the company issued a disappointing profit guidance for 2026, citing unfavorable currency swings and a negative impact from U.S. tariffs [1]. The German sportswear giant expects 2026 revenue growth in the high single digits from 2025's total of 24.8 billion euros ($28.86 billion), with operating profit projected to reach around 2.3 billion euros ($2.68 billion). This guidance factors in a 400 million euro negative impact from U.S. tariffs and currency developments [1].
Analysts expressed concern over the profitability outlook, with RBC Capital Markets noting that the guidance was 15% below overall expectations and questioning whether Adidas' approach was overly conservative at the start of the year [1]. Jefferies analyst James Grzinic highlighted that the implied 9% margin from the operating profit forecast was well below expectations [1]. Fourth-quarter sales and profit also slightly missed estimates, coming in at 6.1 billion euros and 164 million euros in constant currencies, respectively, according to FactSet [1].
Despite these challenges, Adidas CEO Bjørn Gulden emphasized the company's ability to drive double-digit growth in the fourth quarter and more than double operating profit, stating that the year ended well for Adidas [1]. The company also presented mid-term targets, projecting currency-neutral sales growth at a high single-digit rate for 2026-2028 and operating profit expanding by a mid-teens annual growth rate over that period [1].
Market reaction was swift, with Adidas shares last seen 6.7% lower, marking a fresh 52-week low. The stock has nearly halved over the past year, falling about 43% in the last 12 months as investors remain skeptical about the company's future [1]. The global sportswear industry faces additional pressures from excess supply and changing consumer preferences in China, affecting peers like Puma and Nike, which are also undergoing turnarounds [1]. Adidas extended CEO Gulden's contract until 2030, signaling confidence in his strategy following the company's crisis after its split with rapper Ye (Kanye West) [1].
CONCLUSION
Adidas' disappointing profit guidance and ongoing industry challenges triggered a sharp sell-off, with shares hitting a new 52-week low. Analyst concerns about margins and investor skepticism underscore the company's uphill battle, despite management's confidence and mid-term growth targets. The market takeaway is negative, with high impact on Adidas' stock and broader implications for the sportswear sector.