Adidas gets World Cup boost in 'very volatile' market
Adidas Reports Strong First-Quarter Results Amid Market Challenges
By Linda Pasquini and Helen Reid
April 29 (Reuters) - Adidas on Wednesday reported stronger than expected first-quarter operating profit and sales, helped by early demand for World Cup soccer products ahead of the FIFA tournament in June.
World Cup Product Strategy
Adidas said it frontloaded World Cup products to its markets to avoid "many supply and transportation issues".
Inventory Decisions and Impact
"It was definitely the right decision to bring in the inventory early, especially for the World Cup," Chief Financial Officer Harm Ohlmeyer told reporters on a call. "Without that, we would not have been able to grow 14% in the first quarter."
Bookings and Expectations
The company took around 250 million euros ($292 million) in bookings for World Cup products in the quarter and expected the same in the current quarter, CEO Bjorn Gulden said later in a call with investors.
Other Growth Drivers
Running Gear Performance
Running gear was also a growth driver with sales rising more than 10%. The Adidas brand is riding high after its ultra-light racing shoes helped Kenyan athlete Sabastian Sawe become the first person to run a sub-two-hour marathon in an official race in the London Marathon on Sunday.
Share Price Movement
Adidas' shares were up 8% at 1447 GMT on the robust performance. The shares have fallen over the past year as the company faced U.S. tariffs and cautious consumers, and are still near their lowest level in more than three years.
Market Environment and Strategy
Analyst Perspective
"Overall, Adidas started 2026 strong, taking share globally, while maintaining full-price selling, which gives us confidence it can deliver on its 2026 sales and profit goals," Telsey Advisory Group's analysts wrote in a note to clients.
Retail Discipline
Adidas said "discipline" in not selling too much to retailers was crucial to avoid sneakers having to be discounted in a "very volatile" retail environment.
Regional Market Conditions
Europe and Discounting
Gulden flagged Europe as the market with the highest levels of discounting and a lot of uncertainty among consumers.
Competition from Nike
U.S. rival Nike said earlier this month it was being "aggressive" with promotions as it tries to clear unsold stock.
Financial Performance
Quarterly Sales and Profit
Quarterly sales rose to 6.6 billion euros ($7.7 billion), even though several countries in the Middle East reported sales declines due to the Iran war.
Impact of Middle East Conflict
"Stores in many of these markets (have) been impacted when war activities are going on. And of course, if you have bomb alarms in a market, that means that the authorities tell you not to open your stores," Gulden told journalists.
The company has lost about $30 million in sales in the quarter due to the conflict, he said.
Emerging markets, which includes the Middle East, represented 13% of sales in the first quarter.
Quarterly operating profit rose by 16% to 705 million euros, well above the 647 million euros projected by analysts in a company-compiled poll.
($1 = 0.8546 euros)
(Reporting by Linda Pasquini in Gdansk and by Helen Reid in London. Editing by Thomas Seythal, Shri Navaratnam and Jane Merriman)
