Sportswear giant Adidas drops 8% after profit guidance disappoints

Core Viewpoint - Adidas shares fell by as much as 8% following a disappointing 2026 outlook, impacted by unfavorable currency fluctuations and U.S. tariffs [1] Financial Performance - The company anticipates 2026 revenue growth in the high single digits from 2025's total of 24.8 billion euros ($28.86 billion) [1] - Operating profit is projected to reach around 2.3 billion euros, despite a negative impact of 400 million euros from U.S. tariffs and unfavorable currency developments [2] - Fourth-quarter sales were reported at 6.1 billion euros, with profit at 164 million euros in constant currencies, both slightly missing estimates [3] Profitability Outlook - The implied operating profit margin of 9% from 2.3 billion euros is below expectations, leading to disappointment among investors [2][3] - Analysts noted that the profitability outlook was 15% below overall expectations, raising questions about the conservativeness of the EBIT guidance [2] Mid-term Targets - Adidas presented mid-term targets, forecasting currency-neutral sales growth at a high single-digit rate from 2026 to 2028, with operating profit expected to expand at a mid-teens annual growth rate during this period [4]