Stock Markets January 29, 2026

Adidas ADRs Jump After Preliminary Q4 Results and €1 Billion Buyback Plan

Strong currency-neutral growth and margin upside lift shares; company to outline full guidance in March

By Hana Yamamoto ADDYY
Adidas ADRs Jump After Preliminary Q4 Results and €1 Billion Buyback Plan
ADDYY

Adidas reported preliminary fourth-quarter results showing solid currency-neutral top-line growth, margin improvement that beat expectations, and announced a return-to-capital program. The news lifted the company's ADRs and sets the stage for full-year guidance at a March presentation while management cites cash flow and balance sheet strength to fund the repurchase.

Key Points

  • Adidas reported 10% currency-neutral growth in Q4 and 11% growth excluding Yeezy, and its ADRs rose 4% following the announcement - impacts equity markets and consumer discretionary sector.
  • The company posted a 2.7% operating margin in Q4, a 170 basis point year-over-year improvement, and a gross margin of 50.8% that beat forecasts by 90 basis points - relevant to profitability analysis in apparel and retail.
  • Adidas plans to repurchase up to 1 billion of shares in 2026, funded by cash flow and a strong balance sheet; Bernstein estimates this could add up to ~10c to EPS - significant for shareholder returns and capital allocation discussions.

Adidas AG reported preliminary fourth-quarter figures indicating a 10% increase in revenue on a currency-neutral basis, and an 11% gain when excluding products from the Yeezy lineup. The company also recorded a gross margin outcome that topped forecasts by 90 basis points, a set of results that propelled Adidas AG ADR shares higher by 4% on Thursday.

Alongside the initial results, Adidas unveiled plans to repurchase up to 1 billion of its stock during 2026, with repurchases slated to begin in February. This program represents the company's first formal buyback initiative since 2022.


Profitability and margin trends

On the profitability front, Adidas reported an operating margin of 2.7% for the fourth quarter, an improvement of 170 basis points versus the prior year and in line with market expectations. The company's gross margin rose by 100 basis points to 50.8%, exceeding analyst forecasts by 90 basis points despite encountering headwinds from increased tariffs and foreign exchange pressures.

For the full year, the Adidas brand delivered 13% currency-neutral growth, marking the second straight year at that growth rate. Management noted that this expansion was broad-based, driven by double-digit percentage gains across all markets and channels.


Analyst reaction and financing the buyback

Analysts at Morgan Stanley described the preliminary fourth-quarter results as "encouraging from both a quantitative and qualitative standpoint." Company commentary emphasized that the planned share repurchase will be funded through strong cash flow generation, a robust balance sheet, and management's confidence in future brand development. Bernstein highlighted that the buyback equates to an up to approximately 10 cent increase to earnings per share.

Adidas has indicated it will present more detailed guidance when it provides full-year results on March 4.


Implications for investors and markets

The combination of accelerating currency-neutral sales growth, margin expansion that beat expectations, and a sizable buyback program underpins the positive market response to the preliminary results. Investors will be watching the March 4 full-year presentation for more granular guidance and confirmation of the preliminary figures.

Risks

  • Gross margin beat occurred despite headwinds from higher tariffs and foreign exchange pressures, indicating margin performance remains exposed to trade policy and FX volatility - risks for the global apparel and retail sectors.
  • Preliminary figures leave room for detail changes when Adidas issues full-year results on March 4; investors face uncertainty until official guidance and full disclosures are released - affects equity investors and earnings expectations.
  • The buyback is scheduled to start in February 2026 and is contingent on continued cash flow generation and balance sheet strength; any deterioration in operating cash flow could affect the pace or scale of repurchases - relevant to capital markets and investor returns.

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