Adidas World Cup push delivers sales surge but unsettles investors

Adidas shares fell as much as 17% after the sportswear group’s investment behind the 2026 FIFA World Cup weighed on quarterly profit and prompted concern over the cost of sustaining its growth.The company reported record second-quarter revenue of €6.7bn, up 14% on a currency-neutral basis, but operating profit of €574m fell short of market expectations.Adidas chief executive Bjørn Gulden said: “This World Cup was like a fairy tale for me. I am so proud of what our teams around the world achieved. I do not think we could have scripted it better.“Our marketing campaign Backyard Legends brought back the love for the game the way we used to play it in the streets. The products with jerseys, culture wear, footwear and balls showcased what Adidas football should look like and we also sold much more than ever before.”Marketing investment increased by €212m during the quarter as Adidas backed team sponsorships, products and campaigns around the tournament in North America.The company sponsored 14 national teams, including finalists Spain and Argentina, and generated about €1.5bn in World Cup-related sales.Football and running helped Adidas’ performance division increase revenue by 39%, while clothing sales rose 35%. Direct-to-consumer revenue climbed 25% as the tournament supported demand across stores and online channels.Net income from continuing operations increased 6% to €398m, below analyst forecasts, while operating profit rose 5% from the same period in 2025.The market reaction reflected investor concern that the additional sales generated by the World Cup had not produced a corresponding increase in earnings.Adidas raised their full-year currency-neutral revenue growth forecast from a high-single-digit percentage to between 9% and 10%.The company retained its operating profit target of about €2.3bn, disappointing investors who had expected the stronger sales performance to support an upgrade.Gross margin improved by 0.8 percentage points to 52.5%, although heavy discounting in the wider footwear market remains a risk to profitability.Sales rose 17% in North America and 28% in Latin America, while Greater China increased 15%. European growth was limited to 6% as Adidas maintained a cautious approach to wholesale inventory.The company is seeking to use the World Cup to narrow Nike’s lead in the US and strengthen its position beyond retro footwear lines such as Samba and Gazelle.Adidas also announced that chief financial officer Harm Ohlmeyer will leave at the end of 2026 and be replaced by Birgit Kretschmer.Management must now demonstrate that the audience reach and consumer demand generated by the World Cup can produce longer-term revenue without placing continued pressure on margins.