Adidas raises profit outlook to 2.5 billion euros after record quarter
Key Facts
Adidas raised its 2026 operating profit forecast to 2.5 billion euros from 2.3 billion euros in an unscheduled third-quarter results update, according to Reuters. The upgrade followed record quarterly operating profit, with the company receiving U.S. tariff refunds during the period. Third-quarter operating profit reached 1.008 billion euros, compared with 736 million euros in the same period a year earlier. Operating profit thus rose 37% year on year, according to the agency, an improvement accompanied by a revision to full-year estimates. The profit forecast upgrade comes after the company raised its sales outlook when announcing second-quarter results in July, although earnings for that period missed analysts' expectations.
Adidas received about 200 million euros in U.S. tariff refunds, equivalent to 224.3 million dollars, according to The Wall Street Journal. The newspaper described the refunds as representing "most of its total claims", covering the bulk of the amounts the company had sought. The tariff refunds followed a U.S. court ruling, according to Reuters, among the developments accompanying the announcement of record quarterly earnings. When Adidas issued its annual outlook in March, it had assumed a combined negative impact of about 400 million euros from U.S. tariffs and unfavorable exchange-rate movements. That estimate covered the combined impact of tariffs and currencies on 2026 operating profit, while the amounts subsequently refunded related to U.S. tariffs, according to reports by the agency and the newspaper.
Second-quarter results had shown uneven growth across product categories, according to figures in Investing.com's earnings call coverage. Apparel sales rose 35% during that period, while accessories posted a 20% increase and performance sports products grew 39%. On earnings, second-quarter operating profit rose 5% to 574 million euros, according to Reuters, under pressure from marketing spending. That profit fell short of analysts' average forecast of 623 million euros, despite increasing from the same period a year earlier. Sales gains across product categories thus coincided with earnings below estimates, before Adidas announced record quarterly profit in the third quarter.
For context, Adidas ended 2025 with sales of 24.8 billion euros, according to figures reported by Reuters when the subsequent annual outlook was announced. Operating profit for that year reached 2.06 billion euros, the annual level preceding the new 2026 profit guidance. Over the medium term, the targets the company presented alongside its first-quarter results included an operating margin of about 10% in 2027, according to Investing.com. Adidas aims to exceed that level in 2028 as part of its announced path to improving profitability over the coming years. The company's objectives thus combine an operating profit estimate in absolute terms for the current year with operating margin targets for subsequent years, according to its annual guidance and announced targets.
In the initial reaction to the outlook upgrade, Lang & Schwarz indications ahead of the 21 October 2026 session pointed to an expected 3.3% rise in Adidas shares, according to Reuters. That indication came in premarket trading after the company announced its updated annual profit estimates and record quarterly results. The market's response to the July results announcement had been in the opposite direction, when the shares fell about 19% during the session in which the results were released. Reuters described that drop as a record decline, after earnings disappointed despite the company raising its sales outlook. Between the two announcements, the company moved from quarterly results below analysts' average estimates to record operating profit, while initial indications in October pointed to gains in the shares.
For the remainder of the year, Adidas decided to reinvest about 100 million euros during the fourth quarter of 2026, according to Reuters. The reinvestment decision coincides with the increase in the annual operating profit forecast and follows the announcement of preliminary third-quarter results, ahead of the full report. The earnings and outlook update was issued on an unscheduled basis, ahead of the date the company had set for its detailed results announcement. The full report is due on 29 October 2026, according to Reuters, marking the next date in Adidas' financial disclosure calendar. That will be followed by the planned fourth-quarter reinvestment, while the updated annual guidance and medium-term objectives remain the company's announced profit and margin targets.