adidas-Strength Seen in Adidas (ADDYY): Can Its 13.2% Jump Turn into More Strength?

Core Viewpoint - Adidas AG shares experienced a significant increase of 13.2% to $113.51, following a recent announcement regarding tariff pauses that benefit key sourcing nations [1][2]. Group 1: Stock Performance - The stock's recent surge contrasts with a 17.6% decline over the previous four weeks, indicating a volatile trading environment [1]. - The increase in share price was accompanied by a higher-than-average trading volume, suggesting strong investor interest [1]. Group 2: Trade and Sourcing Impact - President Trump's announcement of a 90-day pause on higher tariffs for several nations, including Vietnam, is expected to benefit major apparel and footwear brands like Adidas [2]. - Vietnam has become Adidas' top sourcing nation, contributing 27% of the company's total product volume in 2024, up from 26% in 2023 [3]. - Vietnam led global footwear production last year with a 39% share, while Indonesia and China followed with 32% and 14%, respectively [3]. Group 3: Earnings Expectations - Adidas is projected to report quarterly earnings of$ 1.13 per share, reflecting a year-over-year increase of 117.3%, with revenues expected to reach $6.62 billion, up 11.8% from the previous year [4]. - The consensus EPS estimate for the quarter has been revised 1.9% lower over the last 30 days, which may indicate potential challenges for future price appreciation [5]. Group 4: Industry Context - Adidas is part of the Zacks Shoes and Retail Apparel industry, which includes other companies like Carter's, whose stock also saw significant movement but with a negative trend in earnings estimates [5][6].