Zürcher Nachrichten - Adidas shares slump on outlook, Mideast war casts shadow

The maker of Gazelle and Samba trainers forecast operating profit would rise to 2.3 billion euros ($2.7 billion) this year, below analysts' estimates.

The figure was weighed down by an expected 400-million-euro hit from US tariffs and negative exchange rate effects.

The group's shares fell more than eight percent in Frankfurt, extending recent declines, but won back some ground later in the session and closed 3.6 percent lower at around 142 euros.

Nevertheless, 2025 profits were up sharply and Adidas extended the contract of CEO Bjorn Gulden, who has put the group on a more stable footing after the messy end of its lucrative partnership with US rapper Kanye West.

The Middle East conflict that began at the weekend with US-Israeli strikes on Iran, triggering Iranian retaliatory attacks, is the latest geopolitical turmoil that global businesses are having to contend with.

An Adidas franchise store in Israel was destroyed in an attack, but it was closed at the time and no staff were affected, a group executive told reporters on an earnings call.

Gulden said there would be a "revenue impact" where stores in the region have had to close and there could be disruptions to air freight that goes through the Middle East, potentially delaying delivery of some products.

- Years of upheaval -

But executives stressed that it was hard to assess the fallout at this stage and Gulden said Adidas would take the upheaval in its stride.

"If you think about the last four or five years, we've been through Covid... then we had the Russian war... then we had tariffs that no one saw coming, and now we have the Middle East," he said.

"We should be nerve-wrecked, right?... I think our task as management is to try to manoeuvre the leadership as good as we can."

Adidas has had to pay out hefty sums due to US President Donald Trump's tariffs as the company makes many of its products in Asian countries facing levies.

But chief financial officer Harm Ohlymeyer signalled the group would not be among the many companies lodging legal claims to get refunds following the US Supreme Court's ruling that many of the global duties are illegal.

"We will wait and see," he said. "We never know what the tariffs will be next week, whatever decisions will be made."

After the legal setback, Trump has turned to another law to impose a new 10-percent duty on imports.

Adidas has also been hit by the strengthening of the euro against the US dollar before the Mideast conflict began. Worries about Trump's policies sent the dollar lower and this eroded the value of profits Adidas earned overseas.

The disappointing 2026 outlook took the shine off broadly positive results for 2025, with net income jumping 75 percent to 1.34 billion euros.

Sales rose around five percent to 24.8 billion euros, with strong growth for both shoes and apparel.

Gulden's contract was extended until 2030, in a sign of confidence that his strategy is bearing fruit.

He took the helm of Adidas in 2023 following its split from West, now known officially as Ye, after outrage over antisemitic comments he made on social media.

Adidas had developed the popular line of Yeezy trainers with West.

S.Scheidegger--NZN