Adidas Stock: Growth Outlook Fails to Impress Investors

Adidas is forecasting a high single-digit percentage increase in currency-adjusted revenue for 2025, with its core brand expected to grow by at least 10 percent. The sportswear giant anticipates particularly strong performance in North America and China, targeting double-digit growth rates in these strategic markets, while European operations are projected to achieve high single-digit growth. Despite these positive projections, the company's operational profit outlook of €1.7-1.8 billion fell short of analysts' expectations, who had anticipated figures exceeding €2 billion. This conservative forecast triggered a significant stock decline, with shares dropping 2.9 percent to €230.80 in early XETRA trading, pushing the stock 14.3 percent below its February 52-week high of €263.80.

Financial Recovery After Challenging Period

The company has successfully navigated a turnaround following its separation from the Kanye West partnership, reporting a €764 million profit in 2024 compared to a €75 million loss the previous year. Operating margin improved significantly to 5.6 percent from 1.3 percent, partly supported by Yeezy inventory sales that contributed €650 million to revenue and €200 million to operating profit. For shareholders, dividends will increase to €2.00 per share, substantially higher than the previous year's €0.70. Despite current market concerns, the stock remains 27.64 percent above its March 2024 low of €180.82, with analysts maintaining an average target price of €258.08, suggesting potential upside once growth concerns subside.