Company Reports

We think Adidas is a leader in sports and athleisure apparel with a narrow moat based on an intangible brand asset. While it has been beset with problems over the past few years, its recovery is progressing well. In both 2024 and 2025, Adidas achieved sales and profitability that were well above original expectations. It achieved double-digit currency-neutral sales growth in these years despite inconsistent demand for sportswear.

Adidas' revenue rose 13% in the second quarter as it achieved double-digit sales growth in all regions except Europe (6% growth, 31% of total). The company's gross margin increased 80 basis points to 52.5%, but its operating margin fell to 8.5% from 9.2% on a 30% rise in marketing expenses.

With 31% growth in apparel, Adidas' first-quarter currency-neutral sales soared 14%. Although its gross margin fell by 1 percentage point on unfavorable currency movement and higher US tariffs, its operating margin improved by 80 basis points to 10.7% as overhead costs increased by just 3%.

We think Adidas is a leader in sports and athleisure apparel with a narrow moat based on an intangible brand asset. While it has been beset with problems over the past few years, its recovery is progressing well. In both 2024 and 2025, Adidas achieved sales and profitability that were well above original expectations. It achieved double-digit currency-neutral sales growth in both years despite rocky demand for sportswear.

We think Adidas is a leader in sports and athleisure apparel with a narrow moat based on an intangible brand asset. While it has been beset with problems over the past few years, its recovery is progressing well. In both 2024 and 2025, Adidas achieved sales and profitability that were well above original expectations. It achieved double-digit currency-neutral sales growth in both years despite rocky demand for sportswear.

Fourth-quarter results matched Adidas' preliminary release on Jan. 29. Revenue increased 2% (10% currency-neutral), and operating margin was 2.7%. On a currency-neutral basis, sales grew 5%, 3%, and 15% in Europe (30% of total), North America (21%), and Greater China (14%), respectively.

Adidas reported preliminary fourth-quarter results of 10% constant-currency sales growth, a 50.8% gross margin (up 100 basis points), and EUR 164 million in operating profit. In addition, the firm announced plans to repurchase up to EUR 1 billion in shares in 2026.

We think Adidas is a leader in sports and athleisure apparel with a narrow moat based on an intangible brand asset. While it has been beset with problems over the past few years, its recovery is progressing well. In both 2024 and 2025, Adidas achieved sales and profitability that were well above original expectations. It achieved double-digit currency-neutral sales growth in both years despite rocky demand for sportswear.

Adidas' third-quarter sales (EUR 6.63 billion) and operating margin (11.1%) matched its preliminary report of Oct. 21. The firm also held its full-year guidance of 9% constant-currency sales growth and EUR 2 billion in operating profit.

We think Adidas is a leader in sports and athleisure apparel with a narrow moat based on an intangible brand asset. While it has been beset with problems over the past few years, we think its recovery is occurring faster than expected. For example, the company’s original guidance was for mid-single-digit sales growth and operating profit of EUR 500 million in 2024, but its actual results were 12% currency-neutral sales growth and operating profit of EUR 1.3 billion.

We think Adidas is a leader in sports and athleisure apparel with a narrow moat based on an intangible brand asset. While it has been beset with problems over the past few years, we think its recovery is occurring faster than expected. For example, the company’s original guidance was for mid-single-digit sales growth and operating profit of EUR 500 million in 2024, but its actual results were 12% currency-neutral sales growth and operating profit of EUR 1.3 billion.

Adidas revealed preliminary third-quarter results of 8% currency-neutral sales growth, a 51.8% gross margin (up 50 basis points), and an 11.1% operating margin (up 180 basis points). The firm also raised its 2025 operating profit guidance to EUR 2 billion from EUR 1.7 billion-EUR 1.8 billion prior.

We think Adidas is a leader in sports and athleisure apparel with a narrow moat based on an intangible brand asset. While it has been beset with problems over the past few years, we think its recovery is occurring faster than expected. For example, the company originally guided to mid-single-digit sales growth and operating profit of EUR 500 million in 2024, but its actual results were 12% currency-neutral sales growth and operating profit of EUR 1.3 billion.

In a challenging global sportswear market, Adidas' second-quarter sales increased 2% on a reported basis and 8% on a currency-neutral basis. Its gross margin rose 90 basis points to 51.7%, and its operating margin was up 320 basis points to 9.2%.

Adidas' first-quarter 2025 results (13% sales growth, 52.1% gross margin, 9.9% operating margin) aligned with its preliminary report of April 23. The firm reiterated full-year guidance for high-single-digit currency-neutral sales growth and EUR 1.7 billion-EUR 1.8 billion in operating profit.

We think Adidas is a leader in sports and athleisure apparel with a narrow moat based on an intangible brand asset. While it has been beset with problems over the past few years, we think its recovery is occurring faster than expected. For example, the company originally guided to mid-single-digit sales growth and operating profit of EUR 500 million in 2024, but its actual results were 12% currency-neutral sales growth and operating profit of EUR 1.3 billion.

Adidas' US-listed ADRs rallied about 5% as the firm released preliminary 2025 first-quarter results ahead of its full report on April 29. The firm reported first-quarter sales of EUR 1.653 billion (13% growth) and gross and operating margins of 52.1% and 9.9%, respectively.

We think Adidas is a leader in sports and athleisure apparel with a narrow moat based on an intangible brand asset. While it has been beset with problems over the past few years, we think its recovery is occurring faster than expected. For example, the company originally guided to mid-single-digit sales growth and operating profit of EUR 500 million in 2024, but its actual results were 12% currency-neutral sales growth and operating profit of EUR 1.3 billion.

We think Adidas is a leader in athletic and athleisure apparel with a narrow moat based on an intangible brand asset. While it has been beset with problems over the past few years, we think its recovery is occurring faster than expected. For example, the company originally guided to mid-single-digit sales growth and operating profit of EUR 500 million in 2024 but its actual results were 12% currency-neutral sales growth and operating profit of EUR 1.3 billion.

Narrow-moat Adidas’ fourth-quarter and full-year final results matched the preliminary results released Jan. 21 (see our previous note). The firm offered 2025 guidance for high-single-digit currency-neutral sales growth that aligns with our forecast. Although our operating profit estimate of EUR 1.85 billion is a bit higher than the guidance range of EUR 1.7 billion-EUR 1.8 billion, the effect on our valuation is immaterial, and CEO Bjørn Gulden has consistently offered conservative guidance. As such, we are not changing our EUR 180/$94 fair value estimate (excluding currency variation), which we raised from EUR 173/$93 in January. We believe the shares are overvalued. Adidas is recovering from past missteps and exploiting wide-moat Nike’s woes, but profitability remains subpar, and the shares have more than doubled since Gulden was poached from rival no-moat Puma in late 2022.