ADDYY changes
Pick any two versions below to diff them.
- Price
- $88.28 → $98.63(+11.7%)
- Discount category
- Below intrinsic value → Close to intrinsic value
- Next earnings
- Oct 29, 2026 → Jan 29, 2027
- Next earnings is estimate
- No → Yes
- Thesis
- The market prices adidas for the risk that 2026 is a peak year that will be hard to repeat. The FIFA World Cup in June and July 2026 drove much of the growth: removed: Performance added: apparel revenues rose removed: 39% and apparel rose 35% added: 28% in removed: Q2 added: the first nine months of 2026, while footwear rose only 1%. adidas says that the lifestyle footwear market is weak, with added: too much inventory and heavy discounts at many retailers, especially in removed: Europe. Marketing costs rose added: Europe, where Q3 2026 revenues fell 4%. Record Q3 2026 profit of € removed: 212 added: 1,008 million removed: in Q2, and the operating margin fell to 8.5% from 9.2%. added: included a one-time US added: tariff refund of about € 200 million. US tariffs and a strong euro removed: cost about € 400 million in 2026, by the company's estimate. added: still raise costs. The CFO will also change at the end of 2026. For the gap to close, three things must be true. adidas must reach its added: raised 2026 target of about € removed: 2.3 added: 2.5 billion of operating profit. Revenue must keep growing at a high-single-digit rate in 2027 without the World Cup, as the company's mid-term plan says. Footwear must return to growth, so that the operating margin moves above 10% in removed: 2028. added: 2028 without one-time gains. The removed: 9M 2026 results on October 29, 2026 give the first test. The full-year results and the 2027 removed: outlook added: outlook, expected in early removed: March 2027 added: 2027, are the main test. If these checks pass, the gap can close over the next four to six quarters. The main reason it may not close is a weaker consumer and more discounts in lifestyle footwear, which can stop growth after the World Cup.
- Risks
- Growth in 2026 depends partly on the FIFA World Cup. In removed: Q2 added: the first nine months of 2026, Performance revenues rose removed: 39% added: 27% while footwear rose only 1%. added: 2026 profit also includes a one-time US tariff refund of about € 200 million. In 2027 there is no World Cup, so sales added: and profit must grow against a strong year. adidas says that the lifestyle footwear market is under pressure from heavy discounts at many retailers, especially in Europe. Revenues in Europe removed: grew only 6% added: fell 4% in removed: Q2 2026. added: Q3 2026, partly because adidas shipped less to retailers. Longer discounts can lower prices and margins. US tariffs and a strong euro cost adidas about € 400 million in 2026, by its own estimate. Freight and sourcing costs also rose. Higher tariffs or a stronger euro can lower profit further. Inventories removed: rose 13% to added: were € removed: 5,969 added: 5,739 million at removed: June added: September 30, 2026, removed: because added: 5% more than a year earlier, after adidas removed: chose to keep added: kept more product for the World Cup. If demand slows, adidas may need to sell this stock at lower prices.
- Balance sheet
- adidas funds its operations mostly with its cash flow and euro bonds. At removed: June added: September 30, 2026, cash and cash equivalents were € removed: 1,159 added: 1,651 million, up from € removed: 768 added: 1,030 million a year earlier. Adjusted net borrowings, which the company states with lease and pension liabilities, were € removed: 5,193 added: 4,646 million, added: down 3% from a year earlier, and the ratio of adjusted net borrowings to EBITDA was removed: 1.6 added: 1.3 times, down from removed: 1.7 added: 1.6 times. In May 2026, adidas placed a € 500 million bond as an early refinancing of a € 400 million bond due in October 2026. In added: the first nine months of 2026, adidas paid a dividend of € 491 removed: million, or € 2.80 per share, added: million and removed: bought back shares for up to added: completed a share buyback of € 1 removed: billion. added: billion, which cut the shares outstanding to 172.4 million. Operating working capital rose removed: 18% added: 8% to € removed: 6,661 million, mostly because of higher inventories. added: 6,682 million. As of removed: Jun added: Sep 30, 2026.
- Checkpoints
- Oct 29, 2026: 9M 2026 results: growth after the World Cup. removed: Pending. added: Passed. Watch: Currency-neutral revenue growth near the 9% to 10% full-year outlook and the operating profit target of about € 2.3 billion confirmed pass; a cut to either target fails. removed: Mar added: Outcome: adidas kept its outlook for 9% to 10% currency-neutral revenue growth and raised its operating profit target to about € 2.5 billion, helped by a one-time tariff refund. Jan 29, 2027 (estimate): Full-year 2026 results and 2027 outlook. Pending. Watch: removed: An added: 2026 operating profit of about € 2.5 billion and an outlook for high-single-digit currency-neutral growth in 2027 removed: and added: with higher operating profit removed: passes; added: without the tariff refund pass; an outlook for flat sales or lower profit fails.
- Recent events
- added: Oct 29, 2026: adidas reported Q3 2026 results. Revenues rose 9% to a record € 7,252 million, and 7% currency-neutral. DTC sales grew 17%, but wholesale grew only 2%, and revenues in Europe fell 4%. Footwear revenues were flat, while apparel rose 19%. Gross margin rose to 54.3%, helped by a US tariff refund of about € 200 million. Operating profit rose 37% to a record € 1,008 million, and EPS from continuing operations was € 4.06. Inventories fell 4% from June 30 to € 5,739 million. Oct 20, 2026: adidas raised its 2026 operating profit outlook to about € 2.5 billion, from about € 2.3 billion, after preliminary Q3 results. The increase includes about € 200 million from the US tariff refund and about € 100 million from higher profitability, less about € 100 million that adidas will reinvest in Q4 2026. It kept its outlook for currency-neutral revenue growth of 9% to 10%. Sep 11, 2026: adidas cancelled 6,000,000 treasury shares from its share buyback. Its nominal capital fell to € 174,000,000, divided into 174,000,000 shares. The buyback of up to € 1 billion in 2026 was done in two tranches, the second from June 23 to August 12, 2026. Jul 30, 2026: adidas reported Q2 2026 results. Currency-neutral revenues rose 14% to a record € 6.7 billion, with DTC sales up 25%. Gross margin rose to 52.5%. Operating profit rose 5% to € 574 million, after € 212 million more marketing spend for the World Cup. adidas raised its 2026 revenue growth outlook to 9% to 10% and kept its operating profit target of about € 2.3 billion. Jul 30, 2026: adidas said that Birgit Kretschmer, the CFO of C&A, will join its Executive Board on September 1, 2026. She will succeed Harm Ohlmeyer as CFO at the end of 2026. Mr. Ohlmeyer decided not to extend his mandate after almost 30 years at the company. May 19, 2026: adidas placed a € 500 million bond. It was an early refinancing of a € 400 million bond due in October 2026. Apr 29, 2026: adidas reported Q1 2026 results. Currency-neutral revenues rose 14% to € 6.6 billion. Operating profit rose 16% to € 705 million, and the operating margin rose to 10.7%.