German sportswear giant Adidas shares fell sharply on Wednesday after the company issued a weaker-than-expected outlook for 2026, while warning that the business impact of the escalating Middle East conflict remains uncertain, AFP reported.
The maker of Gazelle and Samba trainers said it expects operating profit to rise to 2.3 billion euros ($2.7 billion) in 2026 despite a 400-million-euro hit from US tariffs and negative currency effects.
Adidas shares dropped about eight per cent on the Frankfurt Stock Exchange to around 137 euros, extending a steady decline in the stock in recent months.
Deutsche Bank said guidance for operating income and profit margins from the group, which ranks second only to Nike globally in sportswear sales, was “slightly weaker than expected”.
The company also flagged uncertainty stemming from the widening Middle East conflict that began with US-Israeli strikes on Iran and subsequent retaliatory attacks across the region.
An Adidas franchise store in Israel was destroyed in an attack, though it was closed at the time and no staff were affected, a company executive told reporters during an earnings call.
Chief executive Bjorn Gulden said there could be a “revenue impact” as stores in the region close and air freight routes through the Middle East face disruptions, potentially delaying product deliveries.
However, executives stressed it was too early to assess the broader fallout.
“If you think about the last four or five years, we’ve been through Covid… then we had the Russian war… then we had tariffs that no one saw coming, and now we have the Middle East,” Gulden said.
“We should be nerve-wrecked, right?… I think our task as management is to try to manoeuvre the leadership as good as we can.”
Adidas has also faced pressure from US tariffs imposed under President Donald Trump, as many of its products are manufactured in Asian countries subject to the levies.
Chief financial officer Harm Ohlymeyer said the company would not immediately join firms seeking refunds after the US Supreme Court ruled many of the global duties illegal.
“We will wait and see,” he said. “We never know what the tariffs will be next week, whatever decisions will be made.”
Following the court ruling, Trump has moved to impose a fresh 10 per cent duty on imports under another legal framework.
The company has also been affected by the strengthening euro against the US dollar prior to the Middle East conflict, which reduced the value of overseas earnings.
The cautious outlook overshadowed otherwise strong results for 2025. Adidas reported net income rising 75 per cent to 1.34 billion euros, while sales increased around five per cent to 24.8 billion euros, driven by strong demand for footwear and apparel.
Adidas also extended Gulden’s contract until 2030, signalling confidence in his leadership.
He took charge in 2023 after the company severed ties with US rapper Kanye West, now known as Ye, following backlash over antisemitic remarks. Adidas had previously collaborated with West on the popular Yeezy trainer line.
