Last week, Adidas put out Q3 results in line with its preliminary expectations for record sales and profits. Revenue was up 9% year over year with even stronger trends in DTC, which grew 17% year over year.
CEO Bjørn Gulden said on a call with analysts that net sales have grown every quarter since Q1 of 2024, and the retailer has also notched an operating profit each quarter during that timeframe. The biggest challenge the brand is facing right now is the state of the market itself.
“The lifestyle footwear market is currently difficult and yes, you see a lot of discounts,” Gulden said. “Of course it is difficult then to plan growth in the lifestyle footwear market currently. But that’s why it’s so important then to grow in the performance footwear market — and that’s what we’re doing.”
Adidas’ performance category was up 14% on a currency neutral basis in Q3, while lifestyle rose a more modest 3%. The results mirror a trend Nike called out in its own Q3 earnings a month ago, when the activewear giant acknowledged it had oversupplied the Jordan brand and would need to pull back on launches going forward.
That specter will haunt Adidas’ results for the next few quarters, according to Gulden, who predicted the lifestyle market might improve in the back half of next year but stressed that it’s highly dependent on the actions of Adidas’ competitors.
“The market can only grow in footwear lifestyle when the market is clean,” Gulden said.
For now, performance is more in demand.
Data from Circana also marks this as an industrywide trend. Although lifestyle sneakers accounted for the largest share of footwear sales in Q3, performance footwear was “the industry’s primary growth engine,” according to a Monday report. Running in particular is driving growth in performance, “fueled by continued investment in wellness and active lifestyles,” while sports such as soccer and baseball also grew.
For the holiday season, Circana expects footwear sales overall to come in roughly flat thanks to higher prices and softer demand.
Although trends favor performance for now, Adidas’ Gulden stressed that the softer lifestyle trends are temporary.
“This will normalize again,” Gulden said. “The inventories in the total market will come down, people will be more careful, and then when the supply is not higher than demand, the discounts will also disappear and ironically we will then all make more money. And that will happen because it always happens.”
Until it does, Adidas is fairly well positioned, according to analysts.
Telsey Advisory Group last week noted that Adidas is “not immune to market and industry pressures,” but is managing solid brand momentum and full-price sell-through anyway.
“Positively, the company has strength in performance footwear and in apparel to fill the gap and continue to deliver [high-single-digit] growth in 4Q26 and 2027,” those analysts wrote. “In addition, Adidas' wholesale business stands to benefit from retail partners looking to offset weakness and supply reductions in Nike products.”
There are signals that Adidas’ products are still winning with consumers, even in a tougher market. For example, while Adidas’ footwear sales were flat overall in Q3, the category saw 6% DTC growth, “demonstrating continued end consumer demand,” Piper Sandler analysts wrote.
“Adidas has proved once again that it was able to capture consumer demand across the full breadth of sportswear,” GlobalData analyst Louise Deglise-Favre wrote, “from technical garments, running trainers or trendy streetwear pieces, without feeling dispersed or incoherent.”
