Adidas shatters sales records, but profit margin concerns loom
Adidas delivered a stunning quarterly result, exceeding sales expectations and cementing its position as a sportswear powerhouse. Revenue surged 15% year-on-year to €6.7 billion for the second quarter of 2026, fueled by a global appetite for its brands and a strategic focus on key markets.
World cup boost, but profits remain a challenge
The company’s performance was driven by a robust 14% increase in second-half revenues, reaching €13.3 billion. However, the celebratory mood was tempered by operating profit figures that fell short of analyst forecasts, landing at €574 million – a stark contrast to the anticipated €623 million. The primary culprit? A significant investment in the brand’s substantial World Cup marketing campaign, which demonstrably squeezed the quarter’s profitability.
Strategic shifts and growth outlook
Despite the margin pressure, Adidas isn’t backing down. CEO Bjørn Gulden announced a revised revenue forecast for fiscal 2026, now projecting growth between 9% and 10%, a notable upward adjustment from previous estimates. Operating profit remains a key target, expected to hit approximately €2.3 billion. Gulden emphasized the brand’s enduring strength and the remarkable performance of its global workforce, stating, ‘Business in the quarter was unbelievably strong: 14% growth in this volatile environment and an operating profit of €574 million, despite us spending €212 million more on marketing.’
Regional highlights: a global footprint
Regional performance painted a diverse picture. Apparel revenues witnessed a remarkable 35% surge, propelled by double-digit growth in both Football and Originals categories. Footwear sales ticked up 1%, while accessories showed a more impressive 20% gain. Europe saw a 6% revenue increase to €2.1 billion, driven by strong demand. North America experienced a 17% jump to €1.5 billion, followed by gains of 15% in Greater China (€953 million) and 18% in Japan and South Korea combined (€376 million). Latin America delivered a standout performance with a 28% revenue increase to €907 million, and emerging markets rose 12% to €848 million. The brand's ‘Backyard Legends’ campaign, featuring Timothée Chalamet, Messi, and Bad Bunny, proved particularly effective.
Leadership transition & future outlook
Looking ahead, Birgit Kretschmer will be stepping into the role of CFO, succeeding Harm Ohlmeyer on September 1st. Gulden expressed confidence in the brand’s continued momentum, citing strong sell-through, a burgeoning product pipeline, and the ‘heat of the brand.’ While acknowledging external uncertainties, he remains optimistic, stating, ‘All the things we can control look positive.’ Adidas’s success during the World Cup – frequently cited as one of the tournament’s most talked-about brands – underscores its enduring appeal. The company’s resilience, and a particularly shrewd response to consumer demand, is a clear indicator of its future trajectory.