Adidas Q3 Operating Profit Hits Record High, Full-Year Profit Forecast Raised to 2.5 Billion Euros

On October 29, German sportswear maker adidas AG (ADDYY) released its third-quarter 2026 financial results, with revenue rising 9% year-on-year to 7.3 billion euros, a record quarterly high and above the market expectation of 7.2 billion euros; excluding currency effects, revenue grew 7%.

Operating profit surged 37% year-on-year to approximately 1 billion euros, also a record high, with the operating margin improving 2.8 percentage points year-on-year to 13.9%.

Net profit from continuing operations rose 48% year-on-year to 711 million euros, with earnings per share reaching 4.06 euros.

Apparel and Direct-to-Consumer Business Post Strong Growth, European Market Sales Decline

In terms of product performance, adidas AG (ADDYY) third-quarter apparel revenue grew 19% year-on-year at constant currency, mainly driven by strong demand for professional sports and casual wear.

Footwear revenue was broadly flat, primarily due to the company adopting a more cautious wholesale strategy in a market environment with heavy promotional activity. However, direct-to-consumer sales of footwear products still grew 6%.

In terms of sales channels, adidas AG (ADDYY) direct-to-consumer revenue grew 17% year-on-year, with e-commerce growing 18% and owned retail stores growing 16%, indicating that the company's direct-to-consumer sales channels continue to maintain strong growth.

By region, sales in North America, Latin America, and Japan and South Korea grew 12%, 16%, and 19% respectively. The European market declined 4%, mainly due to the company's proactive control of wholesale channel shipments and the short-term impact of an SAP enterprise management system migration at the end of the quarter.

Gross Margin Rises to 54.3%, Full-Year Profit Forecast Raised by Nearly 9%

In terms of profitability, adidas AG (ADDYY) third-quarter gross margin improved 2.5 percentage points year-on-year to 54.3%, mainly benefiting from approximately 200 million euros in tariff refunds and solid performance in full-price product sales.

These factors combined drove a significant improvement in the company's operating margin.

Driven by the strong third-quarter performance, adidas AG (ADDYY) raised its full-year 2026 operating profit forecast from approximately 2.3 billion euros to approximately 2.5 billion euros, an increase of about 8.7%.

The company also expects full-year revenue to grow 9% to 10% year-on-year at constant currency.