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Adidas just had its best year since Björn Gulden took over as CEO. The company posted record revenue of €24.8 billion, more than doubled its operating profit compared to two years ago, and announced its first share buyback in years. For a brand that was in crisis mode in 2023 after the Yeezy fallout, this is a remarkable turnaround story.

Here's what happened.

The Numbers: Record Revenue, Surging Profits

Revenue: €24,811 million, up 5% in euro terms, up 13% currency-neutral for the adidas brand
Gross Margin: 51.6%, up 0.8 percentage points — approaching all-time highs
Operating Profit: €2,056 million, up 54% year-over-year
Operating Margin: 8.3%, up from 5.6% a year ago
Net Income: €1,377 million (continuing operations), up 67%
EPS: €7.46, up 76% from €4.24 a year ago
Dividend: €2.80 per share proposed (up 40% from €2.00)

Translation: Adidas made significantly more money on every level — revenue, profit, and earnings per share all grew strongly. The 76% jump in EPS is the number investors care about most. It means that for every share of Adidas stock you own, the company earned €7.46 in profit, compared to €4.24 last year. That's a massive improvement.

The Yeezy Factor: Why It Matters for Comparisons

This is important context: in 2024, Adidas was still selling off leftover Yeezy inventory (worth around €650 million in revenue). In 2025, there were zero Yeezy sales. So when the company reports 13% growth, that's all organic — driven entirely by the core Adidas brand. Including the Yeezy comparison, growth was 10%.

Translation: Adidas managed to grow revenue by 13% even after removing a product line that was generating hundreds of millions in sales the year before. That's like losing a major customer and still growing double digits. It tells you the core brand is genuinely strong, not propped up by one-off inventory sales.

Where the Growth Came From: Every Region, Every Channel

Growth was broad-based — double digits in every major region. Europe grew 10%, North America 10%, Greater China 13%, Japan/South Korea 14%, Latin America 22%, and Emerging Markets 17%.

All channels grew too. Wholesale (selling to retailers like Foot Locker and JD Sports) was up 12%. Direct-to-consumer — which includes Adidas's own stores and website — grew 14%. E-commerce alone was up 16%.

Translation: This is what "quality growth" looks like. It's not one region or one channel carrying the whole company. Every major market and every sales channel grew at double-digit rates. That's rare, and it tells you the brand's momentum is real and global, not just a pocket of strength in one market.

The Products: From Sambas to Running Shoes

The turnaround started with lifestyle shoes — Sambas, Gazelles, Spezials — which brought Adidas back into cultural relevance. But the bigger story in 2025 is that the momentum has spread across the entire product range.

Footwear grew 12%, with Running up more than 30% driven by the Adizero family. Apparel grew 15%, outpacing footwear, with strong demand in Football, Running, Training, and Originals. Performance (sport-specific products) grew 15%, while Lifestyle grew 12%.

Adidas also expanded partnerships with Liverpool FC, the Argentine Football Federation, and motorsport teams including Audi's new F1 entry. The Mercedes-AMG Petronas partnership alone generated more than €100 million commercially.

Translation: The Samba-Gazelle hype was the spark, but Adidas hasn't become a one-trick brand. Running shoes, football kits, training gear — all growing double digits. That's important because fashion trends fade. Having a broad range of products that sell well means the business isn't dependent on one viral shoe.

Margins: Getting Closer to "Healthy"

Gross margin hit 51.6%, which is close to Adidas's all-time high. This is despite headwinds from a strong euro (which makes international revenue worth less when converted back) and rising US tariffs.

Operating margin climbed to 8.3%, up from 5.6% a year ago and up from essentially zero in 2023. CEO Gulden has set a target of getting above 10% by 2028.

Translation: Gross margin tells you how much Adidas keeps after paying to make the products. At 51.6%, they're keeping more than half of every euro in revenue before operating costs. Operating margin at 8.3% means after paying for everything — factories, staff, marketing, stores — they keep 8.3 cents of every euro. That's solid for a sportswear company, though still below Nike's margins.

The Share Buyback: €1 Billion Coming Back to Shareholders

Adidas announced a share buyback of up to €1 billion in 2026, on top of a €500 million dividend payout. That's €1.5 billion being returned to shareholders this year.

The buyback programme could extend to €1 billion per year in both 2027 and 2028, subject to cash flow performance. The company plans to cancel the repurchased shares.

Translation: A share buyback is when a company uses its own cash to buy its own shares off the stock market. This reduces the total number of shares in existence, which means each remaining share represents a slightly bigger slice of the company. It's one of the main ways companies return profits to shareholders. The fact that Adidas is doing this for the first time in years tells you management believes the business is generating more cash than it needs to invest, and they're confident about the future.

Guidance for 2026: Growing Into the Headwinds

Adidas expects high-single-digit revenue growth (currency neutral) in 2026, adding approximately €2 billion in sales. Operating profit is projected at around €2.3 billion.

But here's the catch: the company faces around €400 million in combined headwinds from US tariffs (~~€200 million) and unfavourable currency movements (~~€200 million). Without those, the underlying profit improvement would be around €650 million.

Looking further ahead, Adidas is guiding for high-single-digit revenue growth every year through 2028, with operating profit growing at a mid-teens compound annual rate over the 2026–2028 period — and an operating margin target above 10% by 2028.

Translation: "Guidance" is a company's official forecast for the future — it's what they're telling investors to expect. Adidas is saying: we'll keep growing, but some of that growth will be eaten by tariffs and currency swings that are outside our control. The underlying improvement is the number to focus on — €650 million more in profit before those external headwinds hit.

Inventory: Growing by Design

Inventories rose 17% to €5.8 billion. That sounds alarming — excess inventory was a major problem across the industry in 2022–2023. But Adidas says this is intentional: they're stocking up early for the FIFA World Cup 2026 and securing faster deliveries to meet demand.

Management guided that inventories should come down through the first half of 2026, with only 7% of total stock sitting in factory outlets, indicating the inventory is fresh and current rather than old product gathering dust.

Translation: Rising inventory isn't automatically bad. If a company is growing 13% a year, it needs more stock on hand to keep shelves full. The key question is whether the inventory is "healthy" (new products that will sell at full price) or "unhealthy" (old products that need discounting). At 7% in outlets, Adidas is saying their inventory is overwhelmingly healthy.

The Bottom Line for Investors

Adidas delivered a record year — beating expectations on revenue, profit, and margins — while doing it entirely on the strength of the core brand, with no help from Yeezy. CEO Gulden has taken the company from near-crisis in 2023 to record profitability in 2025. The company is now returning serious cash to shareholders and guiding for continued growth.

↑ Why This Matters (Bull Case)

Adidas has genuine brand momentum that's broad-based — across regions, channels, and categories. Gross margins approaching all-time highs show pricing power and full-price discipline. The Terrace trend (Sambas, Gazelles) hasn't faded; it's expanded into new silhouettes. Running is up 30%+, Performance grew faster than Lifestyle, and apparel is accelerating. The mid-term outlook (high-single-digit growth, 10%+ operating margin by 2028) gives a multi-year runway. And with €1.5 billion in shareholder returns planned for 2026, the cash flow story is real.

↓ Why This Might Worry You (Bear Case)

Revenue in euro terms only grew 5% — the headline 13% is currency-neutral. A strong euro could continue to compress reported numbers. The 2026 guidance implies slower growth (high-single-digit vs 13% in 2025), and €400 million in tariff and FX headwinds will directly hit profit. Inventories are up 17%, and while management says it's planned, any slowdown in demand would make that a problem fast. Lifestyle trends are inherently cyclical — the Terrace wave will cool eventually, and Adidas needs to prove the next generation of silhouettes can replace it. Competition from Nike (which is also in recovery mode), New Balance, and ASICS is intensifying in both running and lifestyle. And at current valuations, much of the turnaround may already be priced in.

The question is whether Adidas can sustain this momentum as the turnaround tailwinds fade and external headwinds intensify — or whether 2025 was the peak of the recovery cycle.

References

Adidas Investor Relations — Full-Year 2025 Results Press Release (March 4, 2026)
WWD — Adidas Q4 FY Earnings 2025: Double-Digit Rise (March 4, 2026)
The Markets Daily — Adidas Q4 Earnings Call Highlights (March 4, 2026)

Ticker: ADDYY (OTC) / ADS.DE (XETRA) · Reported: March 4, 2026