Adidas shares fell 12.6 percent last Thursday after reporting second-quarter earnings missed analyst targets due to accelerated marketing investments in World Cup and concerns around slower footwear growth, but most analysts remain bullish on the stock, especiially encouraged by strong DTC growth.
Of the nearly 30 tracked major brokerage and financial analysts covering the stock, the large majority rate the stock a “Buy’ or “Strong Buy,’ with a small portion recommending a “Hold” positioning.
Sales in the second quarter surged 14 percent on a currency-neutral basis to reach a quarterly record €6.74 billion, topping analysts’ consensus estimate of €6.63 billion.
The gains were supported by a 35 percent gain on a currency-neutral basis in apparel, supported by strong sales of World Cup jerseys. In apparel, double-digit apparel growth in Football and Originals were complemented by strong increases in Running, Training, Motorsport, and US Sports.
By region, double-digit currency-neutral growth was seen in Greater China (+15 percent), North America (+17 percent), Latin America (+28 percent), Japan/South Korea (+18 percent), and Emerging Markets (+12 percent). Revenues in Europe grew a more modest 6 percent, as the company continued to manage wholesale sell-in conservatively.
Due to the outperformance, Adidas raised its sales outlook for the year, now expecting currency-neutral revenue growth of 9 percent to 10 percent, up from high-single digits previously.
However, operating profit only rose 5 percent in the quarter to €574 million, missing consensus analyst expectations of €623 million. Adidas stepped up marketing spending by €212 million in the quarter, more than originally planned, to support the World Cup and broader brand momentum. Operating overheads also rose because of e-commerce growth, event logistics, store staffing and salary increases.
Adidas was only able to maintain its profit forecast for the year as earnings due to the ramped-up marketing spend.
Some investors were also reportedly concerned that Adidas’ footwear growth slowed to a 1 percent gain in the quarter on a currency-neutral basis, from a 4 percent gain in the first quarter. Adidas management has forecast a rebound in coming quarters.
Adidas also announced that CFO Harm Ohlmeyer will be stepping down after 10 years as CFO and 29 years with the company. Birgit Kretschmer, who recently was CFO of C&A, a leading European fashion retailer, and formerly worked at Adidas for 25 years in various financial roles, will assume the CFO role at the close of the year following a transition period.
Adidas shares closed down €21.00 on the Frankfurt Stock Exchange to €161.25 on July 30 after Adidas reported second quarter results. Shares closed on Monday at €164.80.
At Tesley Advisory Group, Cristina Fernández reiterated her “Outperform” rating while lowering her price target to €200 from €220. She wrote in a note, “Expectations into the 2Q26 print were very high given the visible strength for Adidas during the World Cup.”
Fernández said growth impressed with the 14 percent currency-neutral growth driven by DTC growth of 25 percent. She said North America was “particularly strong,” up 17 percent with 39 percent DTC growth “confirming the high traffic and conversion we observed.” Latin America (+28 percent with DTC +37 percent) and China (+15 percent with DTC up 22 percent) “were also standouts,” she said.
Gross margins, up 80 basis points, were better than expected, “pointing to high-quality revenue,” according to Fernández.
The shortfall in the quarter was due to Adidas’ decision to invest more in marketing (€212 million more year over year vs. the initial plan of €150 million) and higher costs to support DTC during the World Cup, including staffing, pop-up stores, activations, and shipping. Fernández wrote, “While the 2Q26 operating margin and EPS miss were disappointing, given the strong sales, the marketing and DTC investments make sense to drive future sales and customer loyalty.”
Looking to the second half, Fernández saw the implied guidance for revenue growth of 6 percent on a currency-neutral basis as “conservative, as we expect momentum to persist with World Cup sales continuing in July, strength in core football, running, and training, and product launches, like Originals Sport apparel.”
Fernández also sees upside from favorable gross margin drivers and the potential tariff refund. She adds, “As such, we continue to view ADS.DE as an attractive story. The company is executing well, and its growth and profitability remain strong, resulting in significant market share gains and outperformance relative to competitors, particularly vs. Nike, which reported CC sales of (3 percent) in its most recent 4QF26.”
At Goldman Sachs, Richard Edwards kept his “Neutral” rating on Adidas following the Q2 report while trimming his target price to €180 from €185.
Edwards said that while Adidas’ delivered robust currency-neutral growth of 14 percent, it was largely expected given increasingly lofty World Cup expectations while the operating earnings miss led to a “sharp sell-off” in Adidas’ stock. Additionally, the further deceleration in footwear’s currency-neutral growth to 1 percent in the second quarter from 4 percent in the first quarter, 5 percent in the fourth quarter, and 12 percent overall in 2025, “failed to abate investor concerns around the growth profile of the business post the World Cup, in the context of end-of-cycle trends for some major shoe franchises and a promotional marketplace in lifestyle.”
On the positive side, Edwards noted that Adidas is finding “solid” ‘growth in several non-football-related performance franchises, including running, up 28 percent year-over-year; motorsport, up 70 percent; and training, ahead 7 percent. He also noted that Adidas continues to take market share in China, “where growth was impressive” at 15 percent year over year. Edwards concluded, “Thus, we retain our Neutral rating with our FY26/27E EBIT forecasts broadly unchanged.”
Adam Cochrane, at Deutsche Bank, reiterated his “Buy” rating at a €210 price target. He wrote in a note, “In absolute terms 2Q was a good quarter but against a rising tide of World Cup expectations this is going to disappoint investors.”
He noted that the strong currency-neutral gains benefited from a 25 percent DTC gain, supported by strong consumer demand and double-digit growth across all regions. However, profitability disappointed across most major regions, particularly Europe, North America and China, reflecting the substantial World Cup marketing investments. Cochrane stated, “Apparel was the standout category at +35 percent cFX (currency-neutral), clearly benefiting from World Cup merchandise, while Footwear grew only +1 percent cFX as Adidas maintained a disciplined sell-in approach within Lifestyle footwear and Terrace trends continued to fade.”
Cochrane didn’t expect the change in CFO to rattle investors concerned about strategic changes since she previously worked at Adidas for nearly 20 years. However, he saw the earnings shortfall in the quarter weighing on investor’s concerns. He also noted that although sales guidance was raised to between 9 percent to 10 percent growth for the year, analysts’ consensus was already at 10 percent.
Cochrane stated, “The bears will point to 1 percent footwear growth and 6 percent cFX sales growth in Europe, 6 percent wholesale growth as well as the implied 6 percent 2H cFX guide and €1bn in 2H EBIT. The bulls may point to more tariff refunds to come, strong World Cup performance and brand heat as well as the guidance likely being conservative.”
At UBS, Robert Krankowski reiterated his “Buy” rating at a €219.00 price target.
He wrote in a note, “The headline sales growth came in only marginally ahead of sell-side expectations, but well below buy-side hopes for growth at the upper end of the high-teens range. Combined with the more pronounced World Cup top-line benefit, this is likely to reignite the debate around growth sustainability post-World Cup. In addition, the EBIT miss and unchanged guidance, despite being largely driven by higher marketing investment, are likely to be viewed negatively.”
He also noted the investors were likely to take profits given that the stock’s outperformance since April.
By region, better-expected-performances were seen in North America +17 percent (cons. +13 percent); Emerging Markets +12 percent (cons. +11 percent); Latin America, +28 percent (cons.+22 percent). Areas missing analyst targets included Europe +6 percent (cons. +9 percent) and Greater China +15 percent (cons. +16 percent).
Positives included owned store posting 23 percent growth with strong double-digit growth in all formats. He noted that the 6 percent wholesale gain reflected a “conservative sell in approach,” by Adidas, especially in Europe, reflecting “the uncertain consumer environment and heightened promotional activity in the marketplace.”
Krankowski noted that inventories as percent in absolute terms were up 13 percent year on year as Adidas prioritizes “availability of the brand’s products” to support growth.
At Citi Research, Monique Pollard kept her “Buy” rating but reduced her price target to €204 from €236.
Pollard expected a negative stock market reaction given the 2Q26 EBIT miss, flat sales momentum quarter over quarter despite the World Cup boosts, decelerating footwear sales growth, and the reiteration of FY26 EBIT guidance.
Pollard slightly raised her estimate for sales growth on a currency-neutral basis for the current year to 10.1 percent, up from 9.1 percent previously. However, she reduced her estimate for currency-neutral sales growth for FY27 to 4.3 percent (prev. +7.2 percent), reflecting strong 1H26 comps and soft footwear momentum. She raised her FY27 gross margin estimate to 52.6 percent, up from her prior estimate of 52.1 percent and the consensus estimate of 51.9 percent, given tailwinds from channel mix, including strong DTC growth, and lower U.S. tariffs.
At Bank of America Securities, Thierry Cota reiterated his “Neutral” rating at a price target of €184. The analyst wrote in a note issued prior to the analyst call, “We think the brand’s turnaround is well understood, and that the group will return to its previous economics (organic growth at best in line with the sector average, single-digit EBIT margin) which is not factored into consensus estimates.”
Image courtesy Adidas
