adidas (ETR:ADS) executives used their full-year 2025 earnings call to highlight double-digit brand growth, record-level gross margin without the former Yeezy business, and a multi-year plan aimed at sustaining roughly EUR 2 billion of annual top-line growth while improving profitability despite foreign-exchange and tariff headwinds.
Full-year and Q4 performance highlights
CEO Bjørn Gulden said 2025 was “a fantastic year” operationally and for brand momentum, pointing to strong visibility in sport and lifestyle alongside financial outperformance. The company reported 13% currency-neutral growth for the adidas brand for the full year and 11% currency-neutral growth in Q4, which management noted came against a prior-year comparison that still included Yeezy sales.
For the full year, adidas reported an EBIT of EUR 2.056 billion, up 54%. Gulden characterized the company’s gross margin approaching 52% as an all-time high without Yeezy. CFO Harm Ohlmeyer added that total company revenue grew 10% currency neutral (and 5% reported), noting a roughly 5 percentage-point FX gap equating to about EUR 1 billion of impact in 2025.
Regional and channel momentum
Gulden outlined broad-based regional growth in 2025, including North America up 10%, Europe up 10%, Greater China up 13%, Japan and South Korea up 14%, Latin America up 22%, and Emerging Markets up 17%. He reiterated that improving the U.S. business remains a priority, while also calling out Greater China as a market where adidas has “found a business model” combining local design and product adaptation with global ranges.
By channel, management described growth as balanced across wholesale, own retail, and e-commerce. Gulden said the company added about 90 net stores in 2025 (opening 247 and closing 158) and reported that full-price stores and factory outlets “comped” for the year. The company’s channel mix remained around 60% wholesale and 40% direct-to-consumer, with DTC split between 23% brick-and-mortar and 17% e-commerce.
Category and product drivers
Management again emphasized footwear-led growth, with footwear up 12% and apparel up 15% for the year. Gulden said apparel is increasingly positioned to outgrow footwear for a period, which he suggested could benefit the P&L in the short term. Accessories were described as supported by improved sourcing in the U.S. and by FIFA World Cup-related demand (especially balls), which Gulden said investors should expect to remain positive through 2026 quarters.
On performance versus lifestyle, Gulden said performance grew 15% and lifestyle grew 12%. He highlighted football (up 12%) as the company’s “DNA” and said adidas is the market leader again in football. Running was described as accelerating from a lower base, with Q4 running growth of 36% and 29% for the full year. Gulden also pointed to training (up 13%) and improving momentum in basketball, noting visibility from All-Star weekend and new product pipeline under a new team.
Several product franchises and initiatives were discussed as contributors to both performance credibility and lifestyle demand, including:
- Adizero running, including Adizero SL, which Gulden said is approaching 10 million pairs in volume and is “maybe the most seen running shoes in the market right now.”
- Hybrid training and Adizero Dropset, which he said has tested well and has a “huge order book.”
- Comfort running, where adidas is launching HyperBoost, described as a new Boost foam that is 40% lighter than the prior Boost and intended to compete more directly in comfort-focused footwear.
- Motorsport merchandising, where Gulden said the Mercedes-AMG Petronas partnership generated more than EUR 100 million commercially, and adidas added Audi as it enters Formula One.
- Lifestyle “Terrace” franchises (Samba, Gazelle, Spezial, Campus), which management said remain strong even as growth normalizes from exceptionally high levels, with further emphasis on court-related silhouettes including Superstar and a renewed push behind Stan Smith later in 2026 and into 2027.
In Q&A, Gulden said he would rather have “many franchises doing well” than rely on one blockbuster product, calling the early Samba-driven momentum in 2023 “a gift from heaven” but stressing a broader portfolio is healthier.
Margins, costs, and balance sheet updates
Ohlmeyer attributed gross margin improvement to lower product and freight costs versus prior dislocations, a favorable mix, and disciplined pricing/discounting, partially offset by FX and tariffs. He quantified the net tariff impact in 2025 at roughly 50 basis points and said the company would have exceeded 52% gross margin absent that impact.
Looking to 2026, management expects gross margin to be more stable, with Ohlmeyer citing approximately EUR 200 million in tariffs and around EUR 100 million in transactional FX headwind (plus translation effects discussed elsewhere). He also said the company is “very comfortably hedged” going into 2027, suggesting more meaningful FX-related gross margin benefits could emerge then.
On operating expenses, Ohlmeyer pointed to “tremendous leverage” in operating overheads, improving to 31.4% of sales from 34.2%, while marketing investment remained elevated at 12.4% of sales. He also noted that net income grew 67% and basic EPS rose 76%, supported by a lower tax rate of 24.3%, with management suggesting a 24%–25% tax rate as an assumption for 2026 models.
On the balance sheet, inventories increased to EUR 5.8 billion (up 23% currency neutral). Ohlmeyer said this reflected preparation for 2026 growth, early product purchases to secure World Cup availability, and earlier inbound shipments. He guided that inventories should trend down through the first half of 2026 and be below EUR 5.8 billion by year-end 2026, adding that inventory was “very current,” with 72% as goods on hand and 28% in transit, and only 7% in factory outlets. adidas ended 2025 with EUR 1.6 billion in cash and a net leverage ratio of 1.4. Ohlmeyer said the company maintained investment-grade ratings (S&P A stable; Moody’s A3 stable).
2026 guidance, multi-year framework, and shareholder returns
For 2026, management guided to high single-digit growth in local currencies and EBIT of EUR 2.3 billion. Gulden said the company’s underlying EBIT improvement would be about EUR 650 million, but that non-mitigated tariffs (~EUR 200 million) and FX (~EUR 200 million) reduce the reported progression. He also noted adidas is not including potential upside from recent U.S. tariff legal developments in its guidance, including any possibility of reclaiming previously paid tariffs, which he said could total EUR 300 million–EUR 400 million, though management is not accounting for that outcome.
Beyond 2026, Gulden reiterated a framework of adding roughly EUR 2 billion of annual top-line growth in 2027 and 2028, with the company targeting around a 10% EBIT margin in those outer years, while also emphasizing ongoing simplification and process/system optimization to support a more locally empowered operating model.
adidas proposed a 40% dividend increase to EUR 2.80 per share (from EUR 2.00) and reaffirmed a share buyback of up to EUR 1 billion in 2026. Ohlmeyer said the current EUR 500 million tranche is expected to finish by March 18 and that adidas had repurchased EUR 400 million of shares (about 2.6 million shares) as of the prior evening. Management framed combined dividends and buybacks in 2026 as roughly EUR 1.5 billion of shareholder return.
In governance updates, Gulden said Supervisory Board chairman Thomas would resign by the AGM, with the company proposing Nassef Sawiris as chairman, and Matthias Döpfner as a new member. Gulden also said executive Michelle agreed to extend her contract, and he confirmed his own contract extension.
About adidas (ETR:ADS)
adidas AG, together with its subsidiaries, designs, develops, produces, and markets athletic and sports lifestyle products in Europe, the Middle East, Africa, North America, Greater China, the Asia-Pacific, and Latin America. It offers footwear, apparel, and accessories and gear, such as bags and balls under the adidas brand; golf footwear and apparel under the adidas Golf brand; and outdoor footwear under the Five Ten brand. It sells its products through its own retail stores; mono-branded franchise stores and shop-in-shops; and wholesale and its e-commerce channels.
