Adidas AG saw its shares drop as much as 8% on Wednesday after the company issued a disappointing performance outlook for 2026, citing headwinds from unfavorable currency movements and US tariffs.
The German sportswear giant anticipates revenue will grow at a high-single-digit percentage rate in 2026, based on 2025 revenue of 24.8 billion euros ($28.86 billion).
Despite an estimated negative impact of around 400 million euros from US tariffs and adverse currency effects, the company still expects operating profit to increase to approximately 2.3 billion euros.
Analysts at RBC Capital Markets described the profit outlook as "disappointing for investors," noting it is about 15% below overall market expectations. They added, "Given Adidas's tendency for a cautious stance early in the year, the key question is just how conservative this operating profit guidance is."
Jefferies analyst James Grzinic pointed out that the implied operating profit margin of 9%, based on the 2.3 billion euro operating profit figure, falls significantly short of market expectations.
According to estimates from financial data provider FactSet, Adidas's fourth-quarter sales and profit, calculated at constant exchange rates, were 6.1 billion euros and 164 million euros respectively, both slightly missing forecasts.
Adidas CEO Bjørn Gulden stated, "Despite a volatile external environment, we delivered double-digit growth in the fourth quarter and more than doubled our operating profit year-on-year, providing a strong finish to the year."
The company also announced medium-term targets on Wednesday, projecting high-single-digit currency-adjusted sales growth annually from 2026 to 2028, with average annual operating profit growth of around 15% during the same period.
Adidas shares were last down 6.7%, hitting a new 52-week low.
Prior to Wednesday's trading, the stock had fallen approximately 43% over the past 12 months, as investors remain skeptical about the company's prospects.
The growth outlook for the global sportswear industry—characterized by oversupply and shifting consumer preferences in China—represents another significant pressure point for investors.
Adidas's German peer Puma and its larger US rival Nike are facing similar challenges and are also undergoing business transformations. In October last year, Nike's CEO indicated that it would "take some time" for the company to return to profitable growth.
In a show of confidence in its strategy, Adidas also extended CEO Bjørn Gulden's contract until 2030 on Wednesday.
Gulden took over the company in 2023 to stabilize the business following a crisis triggered by the termination of the partnership with rapper Ye (formerly Kanye West) after he made antisemitic remarks. The company had previously relied heavily on sales from the Yeezy sneaker line endorsed by Ye.
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