Adidas raises outlook on World Cup demand, but profit miss triggers record share drop
World Cup sponsorship drives sales and raised guidance Adidas sponsored both World Cup finalists, boosting football demand. Q2 revenue rose 14% to €6.74bn, beating estimates, and the company raised full-year revenue growth guidance to 9-10% from high single digits. This supports the stock by showing strong top-line momentum.
This is the core positive fundamental driver behind the period's news.
Profit miss and record share plunge on marketing costs Operating profit rose only 5% to €574m, missing the €623m forecast, as World Cup marketing spend jumped €212m. Shares fell over 17% in a day, the biggest drop since its 1995 IPO. Higher costs squeezed margins, hurting investor sentiment.
This explains the sharp negative price reaction and the profit shortfall.
Nike's China online exit could benefit Adidas Nike will stop selling through partner-operated online stores in China from January 2027. Bernstein named Adidas as the biggest near-term beneficiary, as retail partners like Topsports and Pou Sheng will need to replace lost Nike volume. This could lift Adidas's China sales.
This is a new competitive development that may boost Adidas's market position.