Adidas Wins the World Cup and Loses the Market

Adidas Wins the World Cup and Loses the Market

Mark Nichols

Thu, July 30, 2026 at 6:28 PM GMT+3 4 min read

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THE GIST

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Adidas delivered record second-quarter sales of €6.7 billion (about $7.7 billion), up 14% on a currency-neutral basis, helped by the FIFA World Cup, football kits, running demand and strong apparel sales. But operating profit rose only 5% to €574 million, missing expectations as marketing costs jumped.

Shares fell as much as 18%, putting Adidas on track for its worst one-day drop since listing in 1995. Adidas sold the shirts, balls and hype. Investors wanted more of it to reach the bottom line.

WHAT HAPPENED

Adidas reported second-quarter net sales of €6.74 billion, its highest quarterly revenue on record.

Currency-neutral sales rose 14%, driven by football, running and apparel. The company sponsored 14 national teams at the World Cup, supplied the official match ball, kitted out officials and ran a major campaign featuring Lionel Messi, Jude Bellingham, Lamine Yamal, Timothée Chalamet and Bad Bunny.

That helped sales, but it cost money.

Marketing and point-of-sale expenses rose to €924 million, or 13.7% of sales, up from 12% a year earlier. Adidas spent €212 million more on marketing than in the same quarter last year.

Operating profit rose 5% to €574 million, below analyst expectations of about €623 million. Adidas raised its full-year sales guidance to 9% to 10% currency-neutral revenue growth, up from high-single-digit growth, but kept its operating profit target unchanged at around €2.3 billion.

Possible US tariff refunds of $250 million to $300 million are not included in guidance.

WHY IT MATTERS

Adidas had a good quarter. The market treated it like a yellow card.

Expectations were high. Shares had run up ahead of the World Cup, with investors betting that football fever would drive a major sales and profit boost. The sales arrived. The profit did not arrive loudly enough.

Bjørn Gulden has done a strong job repairing Adidas since the Yeezy collapse. The brand has regained heat, products are moving, and the company has been outplaying Nike in several key categories. In a volatile consumer environment, 14% sales growth is impressive.

But investors wanted operating leverage. They wanted proof that higher demand would create bigger margins, not just bigger advertising bills.

The World Cup spending is the big debate. Adidas clearly decided the tournament was too important to underfund. North America hosted the competition, and the US remains a key battleground where Adidas trails Nike. So the company went big on teams, players, events and campaigns.

That strategy makes sense. Football is Adidas's home turf. When Spain and Argentina meet in a final wearing Adidas kits, and the match ball is Adidas too, the brand should take the shot.

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But marketing is only loved by investors when it converts into profits quickly.

Adidas argues that the spend was deliberate, temporary and brand-building. Gulden said marketing levels should normalize in coming months. He also said he was surprised by the share-price drop, noting the business was "unbelievably strong."

He has a point.

Direct-to-consumer revenue rose 25%, with e-commerce up 27% and own retail up 23%. That matters because selling through Adidas's own channels gives the group more control over pricing, inventory and customer data.

Performance categories also looked strong. Football and running helped drive growth, while apparel jumped 35%. Football shirts are not just match-day gear anymore. They have become streetwear, lifestyle products and collectible culture all at once.

But footwear is the warning light. Sales rose only 1%, even though footwear is Adidas's biggest category. The terrace-shoe boom around Samba and Gazelle has been a huge tailwind, but investors are now asking whether that trend is cooling. Gulden says demand remains healthy, but also admits the previous growth pace was not sustainable.

Europe was another soft spot. Sales grew only 6% there, far below regions such as Latin America, North America and China. Heavy discounting in lifestyle footwear has made the market more promotional, which can pressure both brand perception and margins.

This is where the quarter gets tricky. Adidas is growing fast, but not all growth is equal. Apparel is hot. Performance is strong. DTC is improving. But footwear is slowing, Europe is discount-heavy, and World Cup demand may not repeat at the same intensity.

So the market's reaction was not only about one profit miss. It was about sustainability.

Can Adidas keep growing after the World Cup? Can it replace the Samba-and-Gazelle wave with new franchises? Can it take share from Nike without spending too much to do it?

The quarter proved Adidas has momentum. It did not prove the momentum is cheap.

WHAT'S NEXT

Investors will watch whether marketing costs normalize, whether footwear growth reaccelerates and whether Adidas can convert higher sales into stronger margins. The key tests are post-World Cup demand, Europe's discounting problem, the next lifestyle footwear cycle and any US tariff refund benefit.

Adidas got the global stage. Now it needs to show the encore is profitable.