Key Notes
- Adidas reported record third-quarter operating profit of €1.008 billion and revenue of €7.252 billion, with full-price sales and a roughly €200 million tariff refund supporting margins.
- The 2026 operating-profit forecast rises to around €2.5 billion from €2.3 billion, while currency-neutral sales-growth guidance remains unchanged at 9%–10%.
- ADS shares rose in intraday trading as investors weighed the upgrade against planned fourth-quarter reinvestment and continued discounting pressure in lifestyle footwear.
Adidas AG (XETRA: ADS) shares rose Wednesday after the sportswear group reported its highest quarterly operating profit on record and lifted its 2026 profit outlook, helped by stronger profitability and a substantial U.S. tariff refund.
The company’s preliminary results, released October 20, show third-quarter operating profit climbing 37% to €1.008 billion. Revenue increased 9% in reported euros to a record €7.252 billion.
ADS traded at €160.80, up €2.70, or 1.71%, in the delayed Xetra quote displayed by CNBC at 10:45 a.m. Central European Summer Time, or 08:45 UTC. That price snapshot reflects intraday trading, rather than a closing return.
For shareholders, the upgrade comes with an important distinction: Adidas increased its operating-profit forecast, while its full-year currency-neutral sales-growth target remains 9%–10%.
Record Quarterly Profit Includes a Tariff Refund
Gross margin improved by 2.5 percentage points to 54.3%. Adidas attributed the improvement to healthy full-price sales and a refund of approximately €200 million on U.S. tariff claims, partly offset by unfavorable currency developments.
The refund is material relative to the quarter’s €1.008 billion operating profit. Its size is equivalent to roughly one-fifth of that total, although this comparison is not a company-reported measure of underlying earnings.
That distinction helps explain why a record result does not automatically imply the same profit growth can be repeated without additional support. Selling more products at full price strengthens the business’s ongoing economics; recovering tariffs contributes a separate benefit to the reported quarter.
Dividing operating profit by revenue gives a quarterly operating margin of approximately 13.9%. This is distinct from the 54.3% gross margin, which measures profitability before operating expenses.
Profit Guidance Rises While the Sales Target Holds
Adidas now expects full-year operating profit of around €2.5 billion, compared with approximately €2.3 billion previously. The €200 million increase represents an uplift of about 8.7% to the earlier forecast.
The currency-neutral revenue-growth target of 9%–10% was already in place. Adidas raised that sales forecast from a high-single-digit rate in its July 30 update, while keeping the profit forecast at €2.3 billion at that time.
The October announcement therefore changes how much profit management expects to earn from the growth already projected. It does not announce a second increase in the annual sales-growth range.
The distinction also applies to the quarterly figures. Third-quarter revenue rose 9% in reported euros and 7% on a currency-neutral basis; those are different measurements of the same quarter, rather than competing estimates.
Adidas Plans to Reinvest Part of the Improvement
Management supplied a clear bridge to the new profit forecast. Better profitability from the anticipated sales growth contributes approximately €100 million more than previously assumed, while the tariff refund adds around €200 million.
Together, those improvements would take the annual operating-profit outlook to approximately €2.6 billion before additional reinvestment. Adidas plans to put roughly €100 million into fourth-quarter initiatives intended to improve future operating leverage, leaving the published forecast at around €2.5 billion.
Investors should therefore distinguish the final guidance from the higher figure before that spending. The company is deliberately retaining part of the improvement to support future performance.
Those investments remain a management plan. The announcement does not provide a detailed project-by-project allocation or establish the timing and size of the returns they might generate.
Performance Categories Contrast With Lifestyle Pressure
Chief Executive Bjørn Gulden credited marketing, innovation and strong, profitable growth in football, running and training. He also pointed to demand for new apparel collections as a contributor to the lifestyle business.
However, Gulden described lifestyle footwear as challenging because of excessive inventory and discounting in the broader marketplace. His expectation that conditions will normalize is a management assessment, rather than a confirmed turning point across the industry.
The comments put the margin improvement in context. Adidas is emphasizing full-price selling while resisting the temptation to maximize short-term results in a promotional market.
Sector conditions remain uneven. We previously reported Nike’s plans for further layoffs as falling China sales complicated its turnaround. That provides context for the challenges facing sportswear companies, without establishing that Adidas directly captured Nike’s lost sales.
October 29 Results Will Provide the Next Checkpoint
Adidas will publish its final third-quarter financial results on October 29. The current announcement is a preliminary trading and guidance update, rather than the complete quarterly reporting package.
The fuller release will be the next opportunity to assess the performance behind the record totals, including the balance between sales momentum, margins and the investment required to sustain growth.
For ADS investors, Wednesday’s gain follows an improved earnings outlook. The durability of that improvement will depend on maintaining full-price demand and translating reinvestment into stronger operations after the tariff-refund benefit has passed.
