Adidas Beat the Numbers. Now Read the Fine Print.
14% growth, a stock surge, and a CEO who still won't raise guidance. Pay attention to that last part.
adidas dropped Q1 2026 earnings this morning, and the market loved it.
Net sales came in at €6.6 billion, up 14% on a currency-neutral basis, well ahead of the €6.33 billion analysts had forecast. Operating profit hit €705 million (~$824M at current exchange rates), against a consensus estimate of €647 million, about €60 million better than expected. The stock jumped nearly 9% on the news. By most measures, this is a clean beat.
But if you’ve been paying attention to how Björn Gulden runs these calls, you know the number isn’t the whole story. The language around the number is where the real information lives. And this morning, the language was interesting.
The headline
Let’s give credit where it’s due first. This is adidas’ fourth consecutive year of meaningful growth under Gulden, who has described 2026 as the final year of a four-year plan to return the company toi health. Fourteen percent currency-neutral growth on top of more than 20% growth in the prior-year quarter is genuinely difficult to do. This isn’t paper growth built on discounting or channel stuffing. The sell-out data supports it.
Performance categories led the way, with football, running, and training growing 29% on a currency-neutral basis. The running tailwind got a real-world exclamation point when Sabastian Sawe of Kenya became the first person to break two hours in a sanctioned, world-record-eligible marathon, running 1:59:30 at the London Marathon on April 26, wearing the adidas Adizero Adios Pro Evo 3 (and apparently a majority of them are being flipped on StockX, athough, not for the prices that headlines would have you believe). You can’t buy that kind of visibility, and Gulden knows it.
Latin America led all regions at 26% currency-neutral growth. Japan and South Korea came in at 23%. Greater China posted 17%. The brand is genuinely global right now in a way it hasn't been in years... and if you remember what the Greater China numbers looked like in 2022 and 2023, when adidas was writing off Yeezy revenue and watching its most important market crater, this is a genuinely different company.
On the footwear side specifically, footwear revenues grew 4% in currency-neutral terms to €3.7 billion. That’s solid, though it trailed apparel’s 31% growth, and came against a tough comparable from last year’s strong footwear performance.
So far, so good.
Now the fine print
Despite results that camein well above market expectations, adidas did not raise its full-year guidance. The company reaffirmed its forecast for currency-neutral high-single-digit sales growth and operating profit of approximately €2.3 billion for 2026, citing “an environment that is characterized by macroeconomic challenges and elevated uncertainty.”
That’s the tell.
When a company beats by €60 million in a single quarter and still won’t touch full-year guidance, it’s because the back half of the year looks different from the front half. And in adidas’ case, they’re telling you exactly why.
The combined drag from tariffs and unfavorable currency developments is expected to reduce full-year 2026 operating profit by approximately €400 million, with the impact most acute in the first half of the year. Read that again. They beat expectations by €60 million in Q1 and are staring down a €400 million headwind for the full year. The math on that is uncomfortable.
Gross margin slipped from 52.1% to 51.1% year over year, as currency headwinds and higher U.S. tariff costs more than offset an underlying improvement in the business. That underlying improvement is real — adidas is genuinely running the business better than it was three years ago. But it’s being masked by external forces the brand can’t control, and that’s a hard story to tell investors quarter after quarter.
The lifestyle footwear problem
Here’s the part of the earnings call I’d be paying closest attention to if I worked at a brand or retailer right now.
Gulden specifically called out promotional pressure in the lifestyle footwear market as a concern. He warned that keeping a tight rein on how much product flows to retailers is what separates brands that hold their price points from those that don’t... and said adidas is committed to the former, even at the cost of short-term volume.
To me that signals the engineered hype of the Samba supercycle is finally starting to sunset. adidas is already pivoting its marketing spend toward the FIFA World Cup, away from the lifestyle storytelling that carried the brand’s resurgence for two years. That’s not a coincidence. Brands don’t shift that kind of investment unless they’ve already decided the current wave has crested.
The retailers that over-indexed on adidas lifestyle product for H2 2026 are going to have a conversation about inventory levels that nobody wants to have.
North America: the number behind the number
North America expanded 12% in constant-currency terms but registered only a 1% gain in euro-reported figures — the biggest currency distortion of any region. That gap between 12% real growth and 1% reported growth tells you everything about how painful the strong euro is for a German company reporting in euros while doing meaningful business in dollars.
It also means the North American business is growing faster than it looks on paper, which is worth noting for anyone trying to read the US sneaker market from these numbers. Consumer demand in the US for adidas product is actually reasonably healthy. The problem isn’t the market, it’s the currency translation hitting the income statement.
The line from the call that stands out to me
Gulden, talking about where adidas is as a company right now, said something worth sitting with. Speaking directly from the earnings call transcript: “This is not because we’re doing something great today, but it’s of course accumulated what adidas have done over many, many years.”
That’s a CEO being honest about the difference between brand equity and quarterly execution. The Superstar campaign, the Bad Bunny partnership, the sub-two-hour marathon moment... none of that happened overnight. It’s the compounded result of decisions made across decades, including a lot of difficult ones during the Yeezy fallout years that tested whether adidas actually had anything underneath the hype.
Turns out it did. That’s what 14% currency-neutral growth on top of 20% growth looks like.
But Gulden also knows, better than most, that brand equity is not a permanent moat. It requires maintenance. And in a market where tariff costs are rising, lifestyle inventory is piling up, and the World Cup is now your biggest marketing bet for the year... maintenance is a full-time job. More to come on that next week.
The numbers say adidas is healthy. The language says the easy part is over.
Keep building.
-Nick
I’m Nick Engvall, and I’ve been writing about sneakers and culture for two decades, from building Eastbay’s first blog to being employee #9 at StockX. I run Sneaker History (website and podcast) and I’m rebuilding the original sneaker community over at SoleCollector.org. This is The Sneaker Newsletter... the people, the stories, and the business of sneakers. If you want the deeper stuff... the industry analysis, the “From the Vault” stories from inside the business... become a paid subscriber. And if you haven’t yet, my book Small Luxuries: Sneakers is available for pre-order now.
I think temporarily stock was even up 2% on Monday the day after London! Not sure that stuck though.
Im happy to see their performance running pick up a bit, but beyond that their entire line is lacking. I want that mid line trainer / daily trainer to come back! The Boost era was legendary.