By Andrea Figueras
Adidas shares dropped after the German company issued operating profit guidance for 2026 that fell short of analysts' views, with U.S. tariffs and currency headwinds expected to hold back profit growth.
Shares fell 7.1% to 136.6 euros in European late morning trading, taking their plunge since the start of the year to 19%.
Adidas targets an operating profit of around 2.3 billion euros ($2.67 billion) for 2026, including a 400 million-euro hit from U.S. tariffs and currency swings. This compares with a Visible Alpha consensus estimate of 2.72 billion euros. Last year, the company reached 2.06 billion euros in operating profit.
The sporting-goods company has been pursuing a brand revamp strategy since Bjorn Gulden became chief executive in 2023, aiming to get back on track after a period marked by fierce competition. Adidas said Wednesday that it had extended Gulden's contract until the end of 2030.
Under Gulden's leadership, Adidas has typically issued cautious forecasts at the start of the year and then revised them upward. Analysts at RBC said the company's profit expectations would disappoint, and that the key question would be how conservative the outlook was in light of Adidas's prudent approach to guidance.
The main disconnect between guidance and consensus estimates seems to relate to the possible overturning of U.S. tariffs, analysts J.P. Morgan said. Indeed, Gulden said that the guidance did not take the newest tariff rate into account.
Most of President Trump's global duties were struck down by the U.S. Supreme Court in February. Trump then said he would impose a new 15% global tariff on all imports entering the U.S., effective immediately.
Adidas said reduced discounts allowed it to offset a significant hit from currencies and U.S. tariffs last year.
In 2026, the company forecasts a high-single-digit percentage sales increase, when excluding currency movements.
With rivals Nike and Puma mired in their own turnaround programs, Adidas said it aims to increase market share in all geographies through 2028. The company looks to deliver sales growth at a high-single-digit rate over the next two years and an operating margin of more than 10% in 2028, citing market-share gains and a favorable industry backdrop.
The group expects strong cash-flow generation over the next three years, which will translate into increased dividends and share-repurchase programs, it said. Earlier this year, Adidas outlined plans to carry out a 1 billion euro buyback. In addition to this, the supervisory board proposed share buybacks of up to 1 billion euros in both 2027 and 2028.
Write to Andrea Figueras at andrea.figueras@wsj.com
(END) Dow Jones Newswires
March 04, 2026 05:53 ET (10:53 GMT)
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