adidas quarterly revenue hits record high, but World Cup investment fails to deliver expected profits

Adidas sold a record number of products during the World Cup, but did not deliver the profit performance expected by the market.

On July 30, Adidas disclosed its results for the second quarter of 2026. The company's revenue increased by 13% year-on-year to EUR 6.743 billion, and by 14% on a currency-neutral basis, marking a historic single-quarter high.

However, operating profit rose by only 5% to EUR 574 million, falling short of analysts’ consensus forecast of EUR 623 million—a gap of nearly 8%. Net profit from continuing operations grew by 6% to EUR 398 million, also below market expectations.

The gap between revenue and profit has become the main contradiction in this financial report.

In the second quarter, Adidas' gross margin increased by 0.8 percentage points year-on-year to 52.5%. Enhanced full-price sales, a higher proportion of direct-to-consumer channels, and improvements in product and logistics costs continue to support its underlying profitability.

However, these improvements did not offset the sharp rise in World Cup marketing expenses.

During the period, Adidas' marketing and point-of-sale expenses increased by 30% year-on-year, up about EUR 212 million to EUR 924 million, raising the expense-to-revenue ratio from 12% to 13.7%.

As a result, the company's operating profit margin fell from 9.2% in the same period last year to 8.5%.

During this World Cup, Adidas sponsored 14 participating teams, including Spain and Argentina, and provided the official match ball. The company also launched global marketing campaigns around athletes such as Messi and Bellingham, as well as entertainment celebrities.

The event did bring sales growth. Adidas disclosed that World Cup-related products generated about EUR 1.5 billion in sales, and over 17 million jerseys were sold, roughly four times that of the 2022 Qatar World Cup.

In the second quarter, Adidas’ apparel revenue increased by 35% year-on-year on a currency-neutral basis. Performance sports grew by 39%, with football and running as the main drivers—running alone grew by about 30%.

However, the structure of growth was not entirely balanced. Footwear revenue increased by just 1%, and lifestyle business grew by 2%.

Classic models such as Samba and Gazelle, which supported Adidas' past recovery, are gradually entering a stable phase. This quarter’s high growth relied more on football jerseys, event apparel and performance sports products rather than new lifestyle footwear models taking over.

Before the financial report was released, investors expected not only a boost in sales from the World Cup, but also that higher sales would translate into stronger profit elasticity and a more substantial full-year upward revision.

In the end, Adidas raised its full-year currency-neutral revenue growth expectation from "high single digits" to 9–10%, but still maintained its annual operating profit target at about EUR 2.3 billion.

This profit target is below the market expectation of about EUR 2.5 billion, which also means that the incremental revenue from the World Cup has, to a large extent in the short term, been absorbed by increased marketing spending.

The Chinese market remains one of the most stable regions for Adidas this quarter.

In the second quarter, Adidas' Greater China revenue grew by 15% year-on-year on a currency-neutral basis, continuing double-digit growth, though slightly slowing from the 17% in the first quarter.

In May this year, Adrian Siu, Managing Director of Adidas Greater China, revealed that around 65% of products sold in the Chinese market are currently designed by the local team and about 95% of procurement is completed in China.

The synergy and efficiency of the Adidas China team across design, production response, and retail execution has also been improving.

In June, responding quickly to trending "city visit" graphics on social platforms, the company launched a customised print service, resulting in some offline stores experiencing several-fold order increases for a period.

However, given the overall pressure in China’s footwear and apparel market, Adidas’ recovery, compared to industry peaks, remains at the "restoration + catch-up" stage, with further competition and challenges still ahead.