According to Independent.co.uk, Adidas has reported stronger-than-expected first-quarter operating profit and sales, signaling a significant turnaround driven by key athletic achievements and anticipation for future sporting events. The German sportswear giant’s shares climbed 7% at market open following the positive announcement.
The company posted a first-quarter operating profit of 705 million euros, a substantial increase from 610 million euros a year prior and comfortably exceeding analyst projections of 647 million euros. Currency-neutral sales saw a robust 14% rise, reaching 6.6 billion euros. Despite these gains, a stronger euro negatively impacted overall sales by approximately 350 million euros during the quarter.
A boost from the track and pitch
A major catalyst for the strong performance was the surge in running sales, which climbed by over 10%. This boost is partly attributed to the high-profile success of Kenyan athlete Sabastian Sawe, who made history at the London Marathon. Sawe, wearing Adidas’s ultra-light racing “supershoe,” became the first person to complete an official marathon in under two hours on Sunday, drawing significant attention to the brand’s innovative footwear.
Beyond the track, increased demand for football shirts ahead of the 2026 World Cup also contributed significantly to the sales uptick. However, CEO Bjorn Gulden acknowledged “many supply and transportation issues” affecting the availability of World Cup products, suggesting potential for even greater sales had these challenges been mitigated.
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Navigating a challenging market
While footwear growth was a more modest 4% in currency-adjusted terms, apparel sales soared by an impressive 31%, buoyed by local designs such as Chinese New Year track jackets. The company’s direct-to-consumer channels also showed strength, with sales through its own website jumping 25% and its stores seeing 19% growth, outperforming wholesale growth of 8%.
Despite the positive results, Adidas operates in what CEO Bjorn Gulden described as a “very volatile and heavily discounted” retail environment, particularly within the sneaker market. This contrasts with US rival Nike, which has been “aggressive” in its promotions to clear unsold stock. Adidas, however, emphasizes “discipline” in its sales strategy to retailers to prevent discounting. The company also faced regional challenges, with several Middle Eastern countries reporting sales declines attributed to the Iran war.
Looking ahead, Adidas reaffirmed its 2026 outlook, projecting high-single-digit sales growth and an operating profit of 2.3 billion euros. Analysts at Jefferies noted that “today’s update could help shift the investor debate a little more constructively,” suggesting a potential turning point after a period where Adidas shares had fallen due to US tariffs and cautious consumers.
Sources: www.independent.co.uk
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