Adidas: Soaring Beyond Expectations, A New Era of Growth Unleashed
Financial Resilience and Strategic Adjustments
The sportswear giant, Adidas, recently announced a significant uplift in its full-year 2025 financial guidance. This positive revision comes on the heels of a remarkably strong third quarter, where the company demonstrated robust growth across all key performance indicators. The new projection for operating profit now stands at an impressive €2 billion, a testament to the brand's enduring strength and strategic operational excellence.
Third Quarter Triumphs: A Closer Look at Revenue and Profitability
In the third quarter, Adidas recorded a revenue increase to €6.63 billion, up from €6.44 billion in the previous year, despite facing a negative currency translation impact of over €300 million due to a stronger euro. The company's operating profit surged by 23% year-over-year, reaching €736 million, with the operating margin expanding by 1.8 percentage points to 11.1%. Net income for the quarter was €485 million, even with the challenges posed by hyperinflation-related factors.
Driving Factors: Brand Momentum and Mitigation Strategies
Adidas attributes its enhanced profitability prospects to several critical factors. Foremost among these are the sustained momentum of its brand, business performance that exceeded expectations, and effective measures taken to offset the additional costs arising from increased US tariffs. These combined elements highlight the company's ability to navigate a complex global economic landscape successfully.
Product Category Power: Footwear and Apparel Lead the Charge
The growth observed in the third quarter was broadly distributed across product categories. Footwear sales for the Adidas brand saw an 11% rise on a currency-neutral basis, while apparel experienced an even more significant increase of 16%. The performance segment, particularly running and football, contributed substantially with a 17% revenue increase, with running alone growing by over 30%, boosted by the success of its adizero line. Lifestyle revenue also climbed by 10%, propelled by double-digit growth in Originals.
Global Reach: Regional Performance Highlights
Geographically, Adidas demonstrated widespread success. Currency-neutral net sales for the brand increased by 12% in Europe, fueled by double-digit gains in both wholesale and direct-to-consumer (DTC) channels. Other regions also showed strong growth: Greater China (+10%), emerging markets (+13%), Latin America (+21%), and Japan/South Korea (+11%), all benefiting from robust DTC momentum. North America's brand revenue grew by 8%, driven by increases in footwear and apparel, despite a decline in accessories.
Channel Excellence: Wholesale, Retail, and E-commerce Surge
All sales channels contributed to the double-digit growth on a currency-neutral basis. Wholesale revenue expanded by 10%, supported by strong sell-through rates at retail partners and increased shelf space. Own retail sales jumped by 13%, thanks to like-for-like gains and ongoing store investments. E-commerce continued its impressive trajectory with a 15% increase, building on the previous year's more than 25% growth, collectively boosting the brand's DTC business by 14% in the third quarter.
Leadership's Perspective: A Record-Breaking Quarter Amidst Volatility
Bjørn Gulden, CEO of Adidas, expressed immense pride in the team's achievements, highlighting the record-breaking revenues of €6.63 billion, the highest in the company's history for a single quarter. He particularly noted the strong growth in the performance business across categories and regions. Gulden acknowledged the volatile environment, citing US tariff increases and global uncertainties among retailers and consumers, but emphasized the brand's strong resonance with consumers and the team's dedicated efforts as key to their success.