Updated version 1 - Update 2 - Adidas raises its performance guidance after releasing unexpected financial results, stock price rises

Updated stock reaction information, and added analyst commentary in the fourth paragraph

Tristan Veyet/Alessandro Parodi

Reuters, October 21 - On Wednesday, Adidas (ADSGn.DE) shares rose nearly 3% after the German sportswear group raised its full-year outlook on Tuesday evening following the release of a preliminary, unscheduled earnings report (link).

Taking into account a €200 million one-off U.S. tariff refund in Q3 and planned €100 million reinvestment in Q4, Adidas now expects full-year operating profit to reach €2.5 billion, up from the prior target of €2.3 billion.

Analysts at Metzler Securities stated in a note to investors that the unexpected upward revision “powerfully demonstrates once again that Adidas not only continues to gain market share in a challenging environment but is also achieving profitable growth.”

“Although the guidance increase mostly reflects the one-off impact of the U.S. tariff refund, Adidas also benefited this quarter from improved full-price product sales,” Metzler’s Felix Dennl told Reuters, adding that this could drive a roughly 4% uplift in operating profit expectations.

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As the popularity of “Samba” and “Gazelle” sneakers fades, the company has been investing in new styles, including launching the lightest racing shoe ever—the Adizero Adios Pro Evo 3, which helped Kenya’s Sabastian Sawe break the two-hour marathon barrier in April (link).

Adidas had hoped strong results during the World Cup would help it stay ahead of Nike and other rivals, but the company’s revenue outlook released in July after the tournament disappointed the market.

“Right now, the footwear lifestyle business faces challenges mainly due to excess inventory and too much discounting in the market, but we know the situation will normalize soon,” Adidas CEO Bjorn Gulden said in a statement on Tuesday.

JPMorgan analysts noted that, excluding the tariff refund, Q3 operating profit beat expectations by 9%. Including the refund, profit rose 37% to €1.01 billion ($1.13 billion), surpassing consensus analyst forecasts supplied by the company of €742 million.

(1 dollar = 0.8912 euro)

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