Adidas 4Q25 Immediate Call Postmortem
“In a complicated world with many negative things there are also great sport events” – CEO Bjorn Gulden. Have to say, really like Bjorn a lot.
Expect to increase market share in all markets in 2026, including North America. Did anyone tell this to the Nike bulls? Adidas expects to do the annual HSD cc revenue growth over the next three years that Nike should be doing but isn’t. If you want to know what a realistic turnaround timeline is, Adidas has been hard at work now for well over two years (Nike just finishing year one).
Running was up 29% in 2025 - ouch Nike (only up 20%+ just for 2Q26). Dominated marathons last year. First marathon for 2026 was in Tokyo and took 4 out of 6 podium places. Volume of EVO SL is approaching 10 million pairs (that’s very impressive FYI).
Similar positive commentary towards the sporting goods industry over the mid-term as what we heard from On Holding yesterday. Similar reasons: health and fitness focus, casualization, comfort, rising sport participation rates. Like I said yesterday, if these companies are correct in their outlook, then there are several other companies at fire sale valuation levels right now.
They realize they haven’t focused as much on comfort as they should have. You never hear other performance heritage brands say something like that (Nike, Under Armour).
“Female consumer is more important than the male consumer” – said every athletic brand ever but for some reason none of them make product that way except Lululemon. To be fair, Adidas is better than most (Stella McCartney).
We should expect the apparel growth rate to be higher than footwear for a period and that’s good for margin at least in the short term.
Going to see more of the Stan Smith in the back half of 2026 and expect it to be a hot shoe in 2027 given where trends going. A little different but makes me wonder if that also is a positive read-through towards trends at both Vans (VF Corp) and Converse (Nike).
Very close to launching performance shoes that are printed. Is that only for the upper like what On’s Lightspray technology does?
Guidance for 2026 does not incorporate any changes to tariffs from the Supreme Court’s decision.
“The Chinese business is built on lifestyle and running” – guess that implies Nike’s problems in lifestyle are the real issue over there. Yet later in Q&A they took a shot at Vomero being in five different price points in the country. Most confident in the China business over all the others as can’t see what would change. Jurgen from Kepler asked for good color on this in Q&A, particularly outdoor. Building collections with Terrex both on the street and a little on the mountain – sounds a lot like the positioning of Salomon (Amer Sports) but perhaps at less of a premium price point. China will probably be the biggest Terrex market.
Krankowski from UBS got a QTD question in: “Start of year had been good in volatile marketplace both for retail and wholesale. Happy where we are end of February.”
Aneesha’s question got them to illustrate explicitly why Adidas is different than most other brands not named Nike. They might have been lucky to have Samba save them a few years ago but now the company is back at a place when there are many franchises with heat. But most importantly, they have a realistic opportunity to create heat in apparel (others don’t have that skillset yet, think New Balance but even On Holding from our perspective).
*These are our unabridged quick thoughts and notes from the call. We get them out as soon as possible after the call ends. Management has given some topics to dig deeper into and will circle back afterwards with much more in depth work on what was mentioned. You can find that work (and more on Adidas and other retail/consumer research) at our website here: M Squared Capital
Originally posted on X and Substack.