Adidas Bets on a Bold Dividend to Counter Tariff Turbulence

Adidas boosts dividend 40% to €2.80 per share, signaling confidence despite a €400M tariff hit. Q1 results on April 29 will test direct sales cushion.

Investors in Adidas are facing a tale of two narratives. While the company's share price remains under pressure, its management is making a strikingly confident move by proposing a massive dividend increase. This aggressive shareholder return strategy arrives just as the sportswear giant braces for a significant financial hit from new US tariffs.

The board will ask shareholders at the Annual General Meeting on May 7 to approve a dividend of €2.80 per share. This represents a sharp 40% increase from the previous year's payout of €2.00, translating to a total distribution of approximately €500 million. The ex-dividend date is set for May 8. For a stock that is still down by double digits year-to-date, this move is seen as a clear signal of confidence in the underlying business strength and future earnings. Market observers currently forecast earnings per share of around €9.50 for the full 2026 fiscal year.

That confidence will be put to the test on April 29 when Adidas releases its first-quarter results. Analysts are anticipating revenue of €6.33 billion and earnings per share of €2.67, which would mark a double-digit percentage gain year-over-year. The report will provide the first full look at the impact of punitive US tariffs on supply chains from Vietnam. With 27 percent of Adidas's procurement volume originating from the country, the company estimates the additional costs at a substantial €400 million. The key question for the quarter is how effectively the firm's strong direct-to-consumer sales can cushion this blow.

Operationally, Adidas has reasons for optimism beyond the tariff headache. Its direct sales channel is growing at a double-digit rate, fueled significantly by the enduring lifestyle trend surrounding classic models like the Samba and Gazelle. For the full previous year, currency-adjusted revenue climbed 13 percent to nearly €25 billion. The company is also gearing up for a major marketing push around the 2026 FIFA World Cup, a sentimental event as it outfits the German national team for the final time. A large-scale campaign launched in early April, reintroducing the iconic Trefoil logo to the away kits after a 36-year absence in a bid to leverage nostalgia.

Despite these efforts, the competitive landscape presents challenges. Reports indicate Adidas has lost the rights to supply match balls for the UEFA Champions League to rival Nike, and the company is also reassessing its global media budget.

Analysts at Citi remain bullish, however. They recently raised their price target on Adidas stock from €232 to €277, reiterating a "Buy" recommendation. Their rationale cites a more attractive valuation following share price declines and solid earnings support. The stock, which gained nearly 2.7 percent to close at €146.15 on Friday, currently trades roughly 35 percent below its 52-week high of €223.50, suggesting considerable potential upside. While the share price has recently moved back above its 50-day moving average, it remains down about 13 percent since the start of the year.

The coming weeks present a critical balancing act. Solid first-quarter figures could validate the bold dividend strategy and reinforce positive sentiment. Should the results disappoint, the aggressive payout policy may face immediate scrutiny. Alongside Nike, Adidas continues to lobby for an exemption from the US tariffs, but the outcome is uncertain. In the meantime, the company plans significant price increases, though many terms with retailers are already locked in. The proposed dividend now stands as a high-stakes bet that internal momentum can overcome external headwinds.