Dive Brief:
- Adidas reported record annual revenues in preliminary results released Thursday. The activewear giant saw revenues grow 4.8% year over year to 24.8 billion euros ($29.5 billion at press time).
- In currency-neutral terms, and including Yeezy sales from 2024, revenue was up 10% for both Q4 and the year. Fourth-quarter revenues reached nearly 6.1 billion euros, up almost 2% in euro terms.
- Thanks to the strong results, Adidas is launching a share buyback in early February. The retailer plans to purchase up to 1 billion euros’ worth of its shares in 2026, which will be financed through anticipated strong cash flow this year.
Dive Insight:
On the back of a set of record numbers, Adidas is buying back up to 1 billion euros of shares, a move that CEO Bjørn Gulden says reflects the company’s confidence in its brand.
The executive praised the retailer’s team for driving double-digit growth despite “all the external turbulence,” and pointed to gross margin as a sign that the turnaround has legs.
“The double-digit growth in all markets and all channels is of course very pleasing, but even more important is that this is quality growth,” Gulden said in a statement. “Our markets have been very good at managing that the right product in the right amount has been sold in their markets and that we have managed to keep full-price sell-throughs high and discounts under control.”
Operating profit for the year grew by more than 700 million euros, reaching 2.1 billion euros. Margins also improved, with gross margin sitting at 51.6%, despite the impact of tariffs and an unfavorable currency exchange.
With the Winter Olympics coming up and the World Cup happening over the summer, Gulden sees more growth opportunities ahead. The executive projects growth across sports, comfort, lifestyle and fashion categories and expects to take market share.
Adidas’ strength in recent quarters has come as the retailer pursues a local-driven strategy, with regional leadership encouraged to lean into what matters for their respective geographies. The turnaround comes at the same time that Nike has been struggling through its own reset, though CEO Elliott Hill said in its latest quarter that Nike had reached the “middle innings” of its comeback.
