Adidas raises full-year guidance after record Q2 revenue, but investors focus on World Cup costs

Adidas posted record revenue in the second quarter of fiscal 2026, raised its revenue forecast, and benefited from exceptionally strong consumer demand. Nevertheless, the shares fell as much as 17 percent after the the company released its results were. Yet the quarter tells a much bigger story than that of a one-time 2026 FIFA World Cu p boost. A closer look at the numbers and operating trends reveals why.

At first glance, the stock’s plunge came as a surprise. Adidas increased its currency-adjusted revenue by 14 percent in the second quarter to a record €6.7 billion and raised its full-year revenue forecast to a range of 9 to 10 percent growth. The sporting goods manufacturer is sticking to its profit target of around €2.3 billion.

The negative market reaction was triggered instead by marketing expenses related to the World Cup, which were €212 million higher. These pushed the operating margin down to 8.5 percent from 9.2 percent in the previous year – even though operating profit rose to €574 million. But this is precisely where a second look is warranted (see also the Editor’s Note at the end of the article).

Fairy-tale World Cup: Just a short-term effect?

There’s far more to the Q2 figures than just a short-term World Cup effect. The mega-event in the U.S. may have given the quarter an extra boost and made Bjørn Gulden quite happy: “Being the CEO of Adidas is a privilege. Being the CEO of Adidas during a World Cup is even better. This World Cup was like a fairy tale for me! I’m so proud of what our teams have achieved worldwide. We couldn’t have asked for anything better.”

But the real story begins where the tournament ends. That’s because nearly all key operating metrics are now pointing in the same direction.

Running: From trend to business

Running is emerging as a reliable growth driver – a development that VF Corp. highlighted only recently. The category already performed strongly in the first quarter, and growth now appears to be much more broadly based. Adidas is no longer benefiting solely from the success of the Adizero family. Models such as the Evo SL, Adios Pro Evo 3, and Hyperboost Edge demonstrate that the innovation pipeline is working and that consumer interest is shifting across multiple product platforms. This suggests that running has long since become more than just a short-term fad. No wonder Bjørn Gulden has been saying for the past two years: “We need to get back to performance.”

The entire Performance business benefited from this trend. On a currency-adjusted basis, revenue in this segment rose by 39 percent, driven by strong double-digit growth in soccer, running, and motorsports, as well as high single-digit growth in training. The World Cup provided the segment with additional momentum.

However, this momentum was not limited to Performance. Apparel sales also rose by 35 percent on a currency-adjusted basis. In addition to the extensive World Cup collection, reissues of iconic national team jerseys and other apparel collections contributed to this growth. This underscores that demand is now significantly broader than just running shoes.

Increasingly important: Direct line to customers

Like many smaller brands, the industry giant is increasingly focusing on direct-to-consumer business. DTC sales rose by 25 percent in the second quarter, driven by both e-commerce and the company’s own retail stores. Wholesale, on the other hand, grew significantly more slowly, especially in lifestyle footwear. “This segment is currently under pressure, particularly in men’s shoes, as many retailers are offering deep discounts – especially in Europe, but also in many other markets,” explains Gulden.

However, this is less a reflection of weaker demand and more a part of the company’s strategy. Adidas is deliberately holding back sell-in to protect full-price sales and limit price pressure in retail. In short: The company would rather forgo short-term volume than compromise its price discipline.

Consumers are buying – but selectively

At the start of the year, many investors were deeply concerned that consumer sentiment would continue to decline. After the first half of the year, however, the picture looks different. Adidas once again cites exceptionally strong consumer demand and emphasizes that sell-out is growing faster than sell-in. This suggests that the brand is currently benefiting more from demand than many competitors. At the same time, full-price sales are supporting the gross margin – an indication that while consumers continue to shop mindfully, they are apparently willing to pay the regular price for strong brands.

China: Momentum continues

China also remains a key growth driver. Currency-adjusted revenue rose 15 percent in the second quarter to €953 million. Even more importantly, Adidas once again reports significant market share gains. At the same time, nearly all regions are posting strong sales. North America grew by 17 percent on a currency-adjusted basis basis (€1.52bn), Latin America by 28 percent, and Japan/South Korea by 18 percent. Even Europe, where Adidas remains deliberately cautious regarding sell-in, posted a 6 percent increase in revenue (€2.11bn). This suggests that the brand’s recovery is no longer driven solely by China.

Inventory: Higher stock levels are intentional

It’s also worth taking a closer look at inventory levels. Unlike in previous quarters, Adidas is deliberately expanding product availability this time. The reason was the World Cup, for which the company wanted to have sufficient jerseys, shoes, and fan merchandise on hand. Gulden described it as an exceptionally successful campaign. With two Adidas teams in the final, the official match ball, and – for the first time – referees wearing Adidas gear, the brand achieved a presence “we couldn’t have asked for. I think even Adi Dassler would have been proud!” said Gulden. In this case, higher inventory levels were not automatically a warning sign, but rather part of the sales strategy. Nevertheless, it will be crucial whether Adidas can bring inventory back down to normal levels after the tournament.

Profit target confirmed

Despite the significant increase in marketing expenses surrounding the World Cup, Adidas is sticking to its target of an operating profit of around €2.3 billion for the full year. At the same time, the sporting goods manufacturer raised its revenue forecast to currency-adjusted growth of 9 to 10 percent. In doing so, management is signaling that it views the pressures in the second quarter as temporary and continues to rely on robust operating trends.

Editor’s note

Did the market punish the wrong metric?

Is the stock market really all about profitability? If I look at how Adidas stock reacted to the Q2 results, then yes. Record sales? Higher guidance? All well and good. But the only thing that seemed to matter was that the German brand’s profits came in lower than expected. The reason: high marketing expenses related to the World Cup in the U.S. And that’s actually quite curious. Okay, critics might say that a presence on the world stage of soccer comes at a high price. I see it differently: A brand that can ride the wave of its success should do exactly that. After all, Adidas didn’t overshoot the mark by a mile. The stories surrounding the World Cup final – featuring two teams wearing Adidas – reached millions of people and greatly boosted the brand’s appeal. The financial impact of that – if any – will only become apparent in the coming quarters. If demand for products with the three stripes continues to rise – then I’d say they did everything right. I think Adidas deserves to celebrate a little this summer. But then the industry giant will have to prove that the tailwind will keep blowing even without the World Cup.