Adidas Ag Stock Earnings Reports

Q1 2026 highlights: adidas delivered a strong start to the year with currency‑neutral sales up ~14% (reported +7%), reaching ~EUR 6.6bn revenue in the quarter. Direct‑to‑consumer (DTC) grew 22% (own retail +19%, e‑commerce +25%), while wholesale grew 8%. Performance businesses were the main driver (+29%), apparel surged ~31% and footwear was modest (+4%) as lifestyle footwear faced elevated inventories and discounting in some markets. Gross margin came in at 51.1% (down ~100bps versus prior year) largely due to FX and new U.S. tariffs; underlying gross margin trends were positive. Operating profit was EUR 705m (10.7% operating margin), net income EUR 484m. Inventories and working capital were intentionally increased (inventory +13% reported, +17% cc) to ensure product availability ahead of the World Cup and other events. Capital allocation: adidas completed a EUR 500m buyback and plans another EUR 500m repurchase program plus a proposed EUR 500m dividend—total shareholder returns in 2026 targeted at ~EUR 1.5bn. Management reiterated full‑year guidance and medium‑term ambition to add ~EUR 2bn sales per year and achieve ~10%+ EBIT by 2027. Key risks and watch items: continued promotional pressure in Europe/North America, FX and tariff headwinds (~100bps impact on GM in Q1), higher oil prices affecting logistics and materials, and the Middle East conflict which disrupted activity in affected markets (management cited an estimated ~EUR 30m sales impact in Q1 and noted the risk of a larger hit if disruptions persist).