Adidas' Record Quarter Meets a Wall of Cost Pressures — and a CEO's Bold Bet
Published on 08/02/2026 at 17:22 | Redaktion boerse-global.de
The disconnect between a company's operating performance and its share price rarely gets starker than what Adidas shareholders endured last week. The German sportswear giant posted its strongest-ever second-quarter revenue, yet the market's reaction was brutal: the stock at one point shed as much as 17 percent in a single session, one of the sharpest single-day declines of the year.
By Friday's close, the shares had settled at EUR 159.15, down 7.74 percent on the week. The Relative Strength Index at 33.2 points to oversold territory — a level that chart-focused traders often interpret as a precursor to a bounce, though it carries no guarantees.
The Numbers That Confused the Market
On the surface, the quarter looked like a triumph. Currency-adjusted revenue climbed 14 percent to EUR 6.74 billion, a record for the period. The performance segment led the charge with a 39 percent surge, while lifestyle grew a more modest 2 percent. Geographically, North America contributed a 17 percent gain, Europe added 6 percent, and China — a market that has been a persistent headache for western sportswear brands — delivered 15 percent growth in the quarter and 16 percent in the first half.
The problem was on the bottom line. Operating profit came in at EUR 574 million, roughly 8 percent below the EUR 623 million consensus. The operating margin contracted 70 basis points to 8.5 percent. What made the miss particularly frustrating for investors was that the gross margin actually beat expectations at 52.5 percent — the pressure came from the cost side. Management pointed to World Cup marketing spend, higher freight charges, US tariffs, and elevated overheads as the culprits.
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Despite the profit shortfall, Adidas reaffirmed its full-year EBIT target of around EUR 2.3 billion and nudged its revenue guidance up slightly to 9–10 percent growth.
A CFO Change and a CEO's Vote of Confidence
Adding to the unease was a leadership shuffle announced alongside the results. Birgit Kretschmer will take over as chief financial officer from Harm Ohlmeyer, who is leaving the company. A finance chief transition landing immediately after a disappointing earnings print tends to amplify investor nervousness, even when the company draws no connection between the margin pressure and the personnel move.
In a pointed counter-signal, CEO Björn Gulden bought Adidas shares worth more than EUR 500,000 in the wake of the results. Insider purchases of that magnitude are typically read as a confidence vote in the stock, particularly when the price is under pressure. The news that Adidas would not extend its contract with the German Football Association (DFB) added another layer of sentiment drag, though the financial impact on the group is expected to be contained.
Analysts Split Over What Comes Next
The sell-off has done little to dent the broader analyst community's enthusiasm. Bernstein reaffirmed its "Outperform" rating with a EUR 245 price target, while JPMorgan held its "Overweight" stance at EUR 230. Deutsche Bank, Jefferies, and UBS all maintain buy recommendations with targets ranging from EUR 205 to EUR 219. Across 30 analyst assessments, there are 16 buy ratings, 8 overweight votes, and 6 neutral stances — not a single sell. The average price target stands at EUR 205.10, with a range spanning EUR 163 to EUR 255.
Yet a dissenting camp sees a far less rosy picture, floating a target zone of EUR 110 to EUR 125 if the margin squeeze proves structural rather than temporary. That wide divergence — from a classic oversold bounce to genuine doubts about earnings power — explains the unusually heavy trading volumes of recent days.
On the charts, support sits at EUR 147.20 with resistance at EUR 182.45. Some technicians warn of a slide toward EUR 140 if the EUR 160 level fails to hold.
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China's Shifting Landscape Could Offer a Tailwind
One element that got lost in the immediate sell-off could matter more over time. Rival Nike is retreating from discount channels in China, a market where its share has fallen from 27 percent in 2020 to 16 percent in 2025. Two major trading partners will stop selling Nike products entirely from January 2027. Bernstein analysts estimate the US company's operating margin could gain 200 basis points to 24 percent in fiscal 2027 as a result — but the strategic pullback also cedes ground.
For Adidas, which has been growing double digits in China, that repositioning could open additional space. Domestic players like Anta and Li Ning are also expected to gain share in the low-price segment, so the spoils won't be Adidas' alone. Whether any China upside can offset the current margin drag depends on how quickly freight and tariff costs normalize — and how effectively management steers the cost base.
For now, investors are left weighing record operational numbers and a potential market-share windfall in China against a tangible credibility problem around profitability. The CEO's share purchase in the middle of the sell-off adds a personal stake to that debate — whether it reads as reassurance or a mere snapshot remains to be seen in the sessions ahead.
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