Adidas shares fell 17% after the sportswear company reported a 30% increase in marketing expenditure, reported alongside quarterly earnings even as revenue hit a record.
Second-quarter operating profit rose 5% year-on-year to €574 million, missing the market expectation of €623 million compiled by the company. The intraday decline was the steepest daily drop in Adidas' stock market history.
Adidas spent €212 million more on marketing for World Cup campaigns compared to the previous year. The company sponsored 14 national teams for the tournament, including finalists Argentina and Spain. Marketing expenses rose 30% year-on-year.
Despite the profit miss, revenue grew strongly. Second-quarter revenue reached €6.74 billion, exceeding the market expectation of €6.63 billion and setting a quarterly record. Currency-adjusted sales rose 14%.
All regions except Europe saw double-digit sales growth in the second quarter; Europe grew 6%. The direct-to-consumer sales channel grew 25% and performance product revenues increased 39%. Net profit from continuing operations rose 6% to €398 million.
The company's operating profit margin fell from 9.2% to 8.5%. Adidas updated its 2026 revenue guidance, now expecting currency-adjusted sales growth of 9-10%, up from a previous expectation of high single-digit growth. The annual operating profit target was maintained at approximately €2.3 billion.
Adidas did not include potential US tariff rebates of $250-$300 million in its annual forecasts. The World Cup contributed to increased store traffic; visitor numbers in Adidas US stores rose 44.7% in the first full week of the group stage compared to the same period last year.
In a separate announcement, Adidas said Birgit Kretschmer will join the board on September 1 and take over as CFO from Harm Ohlmeyer at year-end. The company's nine-month results are scheduled for release on October 29.