Adidas beat forecasts against a "very volatile" market. Shares soared

Adidas reported growth in key financial indicators for the first quarter well above market expectations. Strong demand helped the largest sportswear brand in Europe to beat forecasts, although the situation in retail - especially in the sneaker segment - was described by company CEO Bjorn Gulden as extremely turbulent and requiring deep discounts.

Adidas sales in January-March jumped 14% excluding currency fluctuations to €6.6 billion, although the German brand's revenue fell in some Middle Eastern countries due to the war in Iran. Operating profit rose 16% to €705 million, both beating consensus forecasts of €6.3 billion and €647 million respectively. Adidas also reaffirmed guidance for 2026: sales growth at a solid single-digit pace and an increase in operating profit to €2.3 billion, The Wall Street Journal reports.

Recently, Adidas has been ahead of German Puma and global market leader Nike in terms of sales growth, but its stock prices did not reflect the positive dynamics of operational performance, states the German business newspaper Handelsblatt. Since the beginning of 2026 Adidas securities have lost in price about 20%, and over the past 12 months - more than a third. The company explains this primarily by the weak sentiment of buyers: the stock market under systemic pressure were shares of almost all manufacturers of mass-market goods, the edition reports.

"The overall situation in retail is very volatile at the moment and in many markets it is highly dependent on discounts, especially in the lifestyl footwear segment. We, of course, hope that the situation will stabilize and discounts will normalize, but, unfortunately, it does not depend on us," - said the head of Adidas (his words are quoted in the company's report). According to him, Adidas' "discipline" in controlling the volume of deliveries to retailers was the decisive factor that helped the brand avoid markdowns on sneakers.

After the publication of the quarterly report Adidas shares jumped at the opening of trading on April 29 in Frankfurt by 8.3% - to €149.25 per paper, but then a little slowed down the rate of growth. Now quotes of the company have a chance to get out of the downtrend, in which they have been in since February 2025, notes dpa-AFX.

The entire sporting goods industry is pinning its hopes on the 2026 FIFA World Cup in America this summer - and the resulting sales boom. Adidas is a key player in the soccer market, emphasized industry expert Klaus Jost: "That's their roots." The year 2026 promises to be "very successful" for the industry, Alexander von Preen, head of Intersport in Germany, told Handelsblatt.

Investment bank Goldman Sachs on April 29 reaffirmed its Neutral rating on Adidas shares and a target price of €165 per unit. Royal Bank of Canada (RBC) also maintained a Neutral rating with a target price of €160.

According to FactSet, over the past three months, the investment consensus on Adidas shares has adjusted from an unqualified Buy to a moderately positive Overweight. Nevertheless, the average target price of €197 per share calculated by MarketScreener implies a 43% upside to the closing price on April 28.

This article was AI-translated and verified by a human editor