Adidas' Record Quarter Masks a Profit Problem That Has Investors on Edge

Adidas posts record Q2 sales but margin miss and CFO departure weigh on stock, now oversold near key support.

The German sportswear giant just delivered its strongest quarterly sales in corporate history — and the market barely blinked. Instead, the focus has landed squarely on a margin squeeze that has knocked the stock into oversold territory and left chart watchers circling a critical support line.

A Revenue Milestone Overshadowed by Costs

Adidas reported second-quarter 2026 results on Thursday showing currency-adjusted revenue up 14 percent to €6.74 billion, with the direct-to-consumer channel surging 25 percent. Yet the operating result climbed just 5 percent to €574 million, falling short of the roughly €623 million analysts had penciled in.

The gap traces back to spending. The company poured an additional €212 million into marketing around the 2026 FIFA World Cup, while freight and procurement costs also weighed on the bottom line. The operating margin consequently slipped to 8.5 percent.

The full-year picture remains intact: Adidas still targets around €2.3 billion in operating profit, though it has nudged its 2026 revenue guidance higher to 9–10 percent currency-adjusted growth, up from a previous high-single-digit forecast.

A Changing of the Guard in the Finance Department

The earnings release coincided with news that long-serving CFO Harm Ohlmeyer will depart at year-end 2026 after nearly three decades with the company. Birgit Kretschmer, a 25-year veteran of the group, steps into the finance chief role and joins the executive board in September.

The timing added a layer of unease to an already tense week for shareholders. CEO Bjørn Gulden, for his part, struck a confident tone, framing the World Cup campaigns as a foundation for future growth rather than a one-off expense.

The Stock's Technical Crossroads

Friday's close saw the shares stabilize at €159.15, up 0.60 percent on the day — but that does little to mask a bruising month. The stock has shed 11.51 percent over the past 30 days and now sits 19.01 percent below its October 2025 high of €196.50.

The technical picture is finely balanced. Adidas trades just 0.84 percent above its 200-day moving average of €157.82, having briefly dipped below it during the post-earnings selloff. The 50-day average sits at €174.20, a gap of minus 8.64 percent. With the RSI at 33.2, the stock is technically oversold, which historically argues against sustained downside pressure. The annualized 30-day volatility of 45.91 percent, however, underscores just how reactive the market has become to fresh headlines.

Bulls vs. Bears: Two Readings of the Same Numbers

The analyst community is split on whether the margin dip is a temporary blip or a structural concern.

The constructive camp points to several factors that could ease pressure in the second half. The bulk of World Cup marketing spend landed in Q2, meaning the cost base should lighten as the year progresses. Adidas has also received an initial — albeit modest — refund on improperly levied US tariffs, with more potentially on the way. The shift toward higher-margin direct-to-consumer channels, evidenced by wholesale lagging behind DTC growth, adds to the case.

JPMorgan maintains an "Overweight" rating with a €230 price target, Jefferies keeps a "Buy" with €205, and RBC Capital Markets holds "Outperform" but trimmed its target from €210 to €200, calling the post-earnings move overdone. The DZ Bank sees fair value at €215 and similarly views the selloff as a market misread.

Adding a personal vote of confidence: Gulden purchased Adidas shares worth approximately €508,569 on Xetra on July 31 at an average price of €158.93.

The skeptical camp counters that freight, procurement, and tariff costs are tied to global supply chains and trade policy — factors that won't reverse on a company's timetable. Berenberg stays at "Hold" with a €190 target, arguing that a low valuation alone won't attract buyers unless consumer sentiment turns.

What to Watch Next

Until the operating margin regains its footing, the shares look likely to remain trapped between the 52-week low of €130.20 and the 50-day average of €174.20. The oversold RSI suggests a technical bounce is possible, but that's not the same as fundamental confirmation.

The key test comes with the third-quarter interim report, due later this year. If management can demonstrate that World Cup costs are fading and tariff refunds are accumulating, the stock could reclaim its footing above the 200-day line. If earnings momentum stalls against the reaffirmed annual targets, another slide toward the year's low becomes a live risk. For now, the €157.82 mark is the line in the sand — hold it, and a push toward the €162.50–€165.00 resistance zone is plausible; lose it, and the downside scenario takes over.