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Dive Brief: - In preliminary figures for the third quarter, Adidas notched a record 7.3 billion euros ($8.1 billion as of press time) in revenue, representing 9% growth year over year. - The company also brought in its highest quarterly operating income on record, reaching 1 billion euros after a 37% increase. Profits were boosted by around 200 million euros in tariff refunds in the quarter, which represents the majority of what Adidas expects to receive. - As a result, Adidas raised its profit guidance for the full year, expecting operating profit to land at 2.5 billion euros. The retailer is also reinvesting 100 million euros in the fourth quarter to improve operating leverage in the future. Dive Insight: Adidas has thrown down another impressive quarter, showering cold water on the turnaround at rival Nike. CEO Bjørn Gulden praised the company’s marketing efforts and investment in innovation for the strong quarter, touting profitable growth in soccer, running and training. “Our fantastic designers and development teams have created new apparel collections that are globally in high demand and currently fueling our lifestyle business. Yes, the footwear lifestyle business is currently challenging, mainly due to too much inventory and too much discounting in the marketplace, but we know this will soon normalize again,” Gulden said in a statement. “In this environment we are not trying to maximize the short-term. Instead we remain disciplined, continue to strengthen our foundation for sustainable and profitable growth and stay focused on our mid-term targets.” While Adidas’ official earnings report won’t come out until next week, preliminary metrics stand in stark contrast to Nike’s latest report, which saw revenue down 4% year over year to $11.2 billion. Nike’s challenges are largely expected to continue through the current fiscal year and into the next one, making this a meaningful competitive opportunity for Adidas. Adidas expects currency neutral revenues to grow up to 10% this year, and the retailer is already taking meaningful share from Nike. “The company is executing well, and its growth and profitability remain strong, resulting in significant market share gains and outperformance relative to competitors, particularly Nike,” Telsey Advisory Group analysts led by Cristina Fernández said Tuesday. Fernández pointed out that this marks 11 quarters of high single digit or double digit growth in constant currency revenue for Adidas. Gross margins in the quarter, which improved by 2.5 percentage points to 54.3%, were helped along by tariff refunds, but Adidas also touted “healthy full-price sales” as a factor. “We expect further growth in 4Q26 and 2027 driven by strength in core categories like running, and training, newness in lifestyle and apparel, and extensions of franchises like Samba and Originals Sport,” Telsey analysts said.
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