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1. Company Snapshot

1.a. Company Description

adidas AG, together with its subsidiaries, designs, develops, distributes, and markets athletic and sports lifestyle products worldwide.It offers footwear; apparel; and accessories and gear, such as bags and balls under the adidas brand.It sells its products through approximately 2,200 own-retail stores; mono-branded franchise stores and shop-in-shops; and wholesale and its e-commerce channels.


The company was formerly known as adidas-Salomon AG and changed its name to adidas AG in June 2006.adidas AG was founded in 1920 and is headquartered in Herzogenaurach, Germany.

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1.b. Last Insights on ADS

Adidas' recent performance has been impacted by several factors. The company's sales decline in North America, down 5% in Q3, has been a significant concern. This decline is attributed to the end of the popular Yeezy sneaker line and the impact of US tariffs. Additionally, a stronger euro has hurt Adidas' sales by approximately $350 million. The company's top-selling Samba sneaker price increase, from $90 to $100, also reflects the challenging environment. Furthermore, Adidas' weak sales in North America, slower than in Europe and Asia, indicate a weaker US consumer.

1.c. Company Highlights

2. Adidas' Q3 2025 Earnings: Strong Revenue Growth and Margin Expansion

Adidas reported a robust financial performance in Q3 2025, with revenues reaching EUR 6.63 billion, representing a 12% currency-neutral growth. The company's gross margin expanded to 51.8%, driven by favorable freight, positive business mix, and effective sourcing. Earnings per share (EPS) came in at EUR 2.6, slightly below analyst estimates of EUR 2.68. The company's operating profit was EUR 736 million, with an operating margin of 11.1%.

Publication Date: Oct -30

📋 Highlights
  • Revenue Growth:: Q3 2025 revenue reached EUR 6.63 billion, reflecting a 12% currency-neutral increase.
  • EBIT Performance:: EBIT hit EUR 736 million with an 11.1% margin, up from 5.9% in Q2 2025.
  • Regional Expansion:: Europe and Greater China grew 12% each, while Japan/South Korea saw double-digit growth.
  • Product Innovation:: Launched Hyper Boost material, 40% lighter than Boost, targeting performance and lifestyle segments.
  • Margin Efficiency:: Gross margin improved to 51.8% (50 bps above prior year) with operating overheads down 8%.

Segment Performance

The company's performance was driven by strong growth in its sports business, with a 17% increase in Q3. The footwear segment was a key contributor, with the Adizero line and new Boost material, Hyper Boost, gaining traction. The lifestyle segment also showed promise, with a 10% growth in Q3, driven by successful collaborations and new product launches.

Regional Performance

Adidas' regional performance was mixed, with North America growing 8% year-to-date, while Europe and Greater China grew 12%. Japan and South Korea showed strong double-digit growth, while Latin America remained robust. Emerging markets presented a mixed picture, but the company was pleased with the overall growth.

Valuation and Outlook

Using the current price, the P/E Ratio is 24.53, indicating that the stock is trading at a premium. The EV/EBITDA ratio is 11.45, suggesting a reasonable valuation. The ROE is 22.3%, indicating strong profitability. Adidas has guided for double-digit growth in the full year and expects to generate EUR 800-1 billion in cash flow in Q4. With a strong pipeline of products and a focus on innovation, the company is well-positioned for future growth.

Challenges and Risks

Despite the positive momentum, Adidas faces challenges, including the impact of tariffs, which is estimated to be around EUR 120 million on the P&L. The company is also cautious about consumer behavior and retail trends. However, with a solid track record of innovation and a strong brand portfolio, Adidas is well-equipped to navigate these challenges.

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.96%)

6. Segments

Europe

Expected Growth: 7.3%

Adidas' strong brand recognition, innovative products, and strategic partnerships will drive sales growth, buoyed by increasing popularity of athleisure wear and European consumers' focus on health and wellness.

North America

Expected Growth: 8.5%

Growing demand for athleisure wear, increasing popularity of running and fitness activities, and strategic partnerships with key retailers drive growth in North America for adidas’ athletic footwear, apparel, and accessories segment.

Greater China

Expected Growth: 12.3%

Adidas’ Greater China segment, comprising China, Hong Kong, and Taiwan, is driven by increasing demand for athletic and casual wear, rapid urbanization, and rising middle-class disposable income, leading to a robust growth forecast.

Emerging Markets

Expected Growth: 10.4%

Adidas’ Emerging Markets segment is driven by increasing demand for athletic wear in Asia, Latin America, and Eastern Europe, fueled by rising disposable incomes, urbanization, and upper-class consumers seeking premium brands.

Latin America

Expected Growth: 10.2%

Adidas' growth is driven by increasing popularity of athleisure wear, expanding e-commerce platform, and strategic partnerships with celebrities and sports teams.

Japan/south Korea

Expected Growth: 5.5%

Adidas’ localized products and marketing campaigns will appeal to Japan and South Korea consumers. The growing demand for athleisure and increasing popularity of sports events will drive sales, alongside the brand’s efforts to strengthen its e-commerce presence.

Other Business Segments

Expected Growth: 5.5%

adidas' growth is driven by increasing demand for athletic wear, expansion into emerging markets and strategic partnerships. Reebok's fitness focus and smaller brands' niche presence will also contribute to growth.

HQ / Consolidation

Expected Growth: 10.3%

adidas' growth is driven by increasing demand for athleisure wear, expansion into new markets, and strategic partnerships. The company's focus on digital transformation and sustainability initiatives also contribute to its growth.

7. Detailed Products

Footwear

Adidas offers a wide range of footwear products, including running, football, basketball, tennis, and lifestyle shoes.

Apparel

Adidas provides a variety of apparel products, including tops, bottoms, dresses, and outerwear for men, women, and kids.

Accessories

Adidas offers a range of accessories, including bags, hats, scarves, socks, and watches.

Equipment

Adidas provides equipment for various sports, including footballs, basketballs, and athletic training gear.

Outdoor Gear

Adidas offers outdoor gear, including hiking boots, trail running shoes, and outdoor apparel.

Team Sports

Adidas provides team sports products, including football, basketball, and baseball gear.

Lifestyle

Adidas offers lifestyle products, including fashion shoes, apparel, and accessories.

8. adidas AG's Porter Forces

Forces Ranking

Threat Of Substitutes

Adidas faces moderate threat from substitutes, as consumers have limited alternatives for high-quality athletic footwear and apparel. However, the rise of athleisure wear and increasing popularity of fashion brands may pose a threat to Adidas' market share.

Bargaining Power Of Customers

Adidas' customers have low bargaining power due to the company's strong brand reputation and limited availability of substitutes. Additionally, Adidas' focus on innovation and sustainability may reduce customers' ability to negotiate prices.

Bargaining Power Of Suppliers

Adidas' suppliers have moderate bargaining power due to the company's dependence on a few large suppliers for raw materials. However, Adidas' strong relationships with suppliers and its efforts to improve supply chain transparency may mitigate this risk.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the athletic footwear and apparel industry. New entrants would need to invest heavily in research and development, marketing, and distribution to compete with established brands like Adidas.

Intensity Of Rivalry

The athletic footwear and apparel industry is highly competitive, with Adidas facing intense rivalry from Nike, Under Armour, and other brands. The company must continuously innovate and invest in marketing and branding to maintain its market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 43.48%
Debt Cost 3.95%
Equity Weight 56.52%
Equity Cost 9.36%
WACC 7.01%
Leverage 76.94%

11. Quality Control: adidas AG passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Amadeus IT

A-Score: 5.5/10

Value: 2.8

Growth: 6.2

Quality: 8.1

Yield: 2.5

Momentum: 5.0

Volatility: 8.7

1-Year Total Return ->

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Compass Group

A-Score: 5.4/10

Value: 2.6

Growth: 7.2

Quality: 4.9

Yield: 3.1

Momentum: 5.0

Volatility: 9.7

1-Year Total Return ->

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LVMH

A-Score: 4.2/10

Value: 2.3

Growth: 6.2

Quality: 6.8

Yield: 3.1

Momentum: 2.0

Volatility: 4.7

1-Year Total Return ->

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Ferrari

A-Score: 4.2/10

Value: 0.7

Growth: 7.7

Quality: 7.2

Yield: 1.2

Momentum: 3.5

Volatility: 4.7

1-Year Total Return ->

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Stock-Card
Delta Plus

A-Score: 4.2/10

Value: 6.7

Growth: 6.0

Quality: 4.8

Yield: 2.5

Momentum: 1.0

Volatility: 4.0

1-Year Total Return ->

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Stock-Card
Adidas

A-Score: 3.4/10

Value: 3.3

Growth: 4.4

Quality: 5.3

Yield: 1.2

Momentum: 1.5

Volatility: 4.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

164.3$

Current Price

164.3$

Potential

-0.00%

Expected Cash-Flows