Adidas raises annual profit outlook to 2.5 billion euros after record quarter
Key Facts
Adidas on October 20, 2026 raised its operating profit forecast for the current year to about 2.5 billion euros from a previous target of 2.3 billion euros after record preliminary third-quarter results. The company reported a 37% year-on-year increase in quarterly operating profit, alongside higher sales and an improved gross margin. Operating profit reached 1.008 billion euros, compared with 736 million euros a year earlier, according to Reuters, reflecting gains from a U.S. tariff refund and improved sales profitability. The company booked a tariff refund of about 200 million euros in the third quarter, supporting reported earnings and the updated annual outlook. But earnings also exceeded analysts' estimates excluding that amount; JPMorgan analysts said quarterly operating profit remained 9% above expectations on that basis. Adidas shares rose about 3% in trading on the Wednesday following the announcement, according to the Reuters report dated October 21.
On sales, Adidas said in its preliminary results statement that third-quarter revenue rose 9% year on year to a record 7,252 million euros. On a currency-neutral basis, revenue growth over the same period was 7%, compared with the reported growth rate, which includes currency effects. The third-quarter gross margin was 54.3%, according to the company, with improved sales profitability accompanying record revenue. The margin rose 2.5 percentage points from the same period a year earlier, an improvement the company attributed partly to strong full-price sales. Adidas described these in its statement as "strong full-price sales," citing their contribution to the improvement in gross margin during the quarter. The company said, however, that "unfavorable currency movements" weighed on the margin despite its year-on-year improvement.
The third-quarter results follow slower operating profit growth in earlier periods of the year, according to comparisons in Adidas' second-quarter results disclosure. In that quarter, operating profit rose 5% year on year to 574 million euros, according to the company's statement. For the first half as a whole, operating profit reached 1,279 million euros, up 11% year on year, before the latest preliminary results were announced. The second quarter also saw 25% growth in direct-to-consumer sales, according to the same disclosure on the company's performance during that period. However, Chief Executive Bjorn Gulden said in the latest results statement that the lifestyle footwear business faced market challenges from excess inventory and widespread discounting. Gulden described the business as "currently difficult, mainly because there is too much inventory and too much discounting in the market," identifying pressures on the business despite the reported record performance.
For the remainder of the year, Adidas plans to reinvest about 100 million euros in the fourth quarter, according to Reuters, as part of planned spending factored into its annual profit outlook. This spending reduces expected profit after accounting for gains supporting the outlook, including the tariff refund and improved sales profitability. For annual revenue, the company expects currency-neutral growth of between 9% and 10%, according to the range in its statement. That range covers the current year as a whole, while the reported quarterly figures cover preliminary third-quarter performance. Adidas is scheduled to publish its final financial results for that quarter on October 29, 2026, according to the date set by the company.