Adidas shares fall 7% as 2026 profit outlook misses target

Adidas shares fell sharply in early trading after the German sportswear group issued a profit outlook for 2026 that came in below market expectations, overshadowing news that it had extended Chief Executive Bjoern Gulden’s contract to the end of 2030.

The stock dropped as much as 7.14% after the company forecast operating profit of around 2.3 billion euros ($2.7 billion) for 2026.

That implies an operating margin of between 8.5% and 8.8%, below the company’s previously stated 10% target, according to RBC analysts.

Adidas said the lower outlook was partly due to US tariffs on imports and the impact of a weak dollar, which it expects will reduce earnings by around 400 million euros this year.

Profit outlook disappoints investors

For 2026, Adidas expects high-single-digit percentage growth in constant-currency sales and operating profit of around 2.3 billion euros, compared with 2.06 billion euros in 2025.

The company reported 2025 sales of 24.8 billion euros and operating profit of 2.06 billion euros.

In its preliminary numbers for fourth quarter of 2025, Adidas reported a revenue of 6.08 billion euros compared with 5.97 billion euros a year earlier.

Operating profit for the quarter rose to 164 million euros from 57 million euros.

Adidas said it expects currency-adjusted sales to continue growing at a high-single-digit rate in 2027 and 2028.

It also aims to increase market share and deliver an operating margin of more than 10% in 2028.

“The strong structural growth of the global sporting goods industry continues to be very supportive for Adidas,” the company said Wednesday.

However, concerns over margin pressure weighed on sentiment.

Sales in North America, the company’s second-largest market, grew 10% in currency-adjusted terms last year but declined 1% in euro terms due to the weaker dollar.

Adidas said it had managed to control discounts and sell “the right product in the right amount” across its markets, according to a statement from Gulden.

CEO contract extended through 2030

The profit outlook came alongside confirmation that Gulden’s contract has been extended until Dec. 31, 2030.

The extension signals the supervisory board’s confidence in his turnaround strategy.

“Gulden drove the successful turnaround of Adidas during the past three years,” said Thomas Rabe, chairman of the supervisory board.

Gulden took over at the start of 2023, following the company’s split with rapper Ye over his antisemitic comments, which triggered a crisis and exposed the brand’s heavy reliance on the Yeezy sneaker line.

Adidas reported a loss in 2023 but has since returned to profitability.

The company also renewed the appointment of Michelle Robertson, responsible for global human resources, people and culture, until Dec. 31, 2031.

In addition, it agreed to propose the re-election of Nassef Sawiris to the supervisory board for a further three-year term.

Adidas has also proposed Sawiris as its new chairman, replacing Thomas Rabe, who has faced shareholder criticism for holding multiple executive roles.

Dividends and buybacks planned

Adidas outlined plans for increased shareholder returns, supported by what it described as strong cash-flow generation over the next three years.

Management proposed raising the dividend by 40% to 2.80 euros per share for 2025.

Earlier this year, the company announced a share buyback of up to 1 billion euros alongside preliminary 2025 results.

It also proposed additional share repurchase programs of up to 1 billion euros in both 2027 and 2028.

Despite the longer-term growth targets and governance changes, the weaker-than-expected margin outlook appeared to drive the immediate market reaction.