Shares of German sportswear giant Adidas fell sharply on Wednesday after the company issued a weaker-than-expected forecast for 2026, while warning that the business impact of the escalating conflict in the Middle East remains uncertain, AFP reported.The maker of Gazelle and Samba shoes said it expects operating profits to rise to 2.3 billion euros ($2.7 billion) in 2026 despite a loss of 400 million euros due to US tariffs and negative currency effects.Adidas shares fell about eight percent on the Frankfurt Stock Exchange to about 137 euros, continuing a steady decline for the stock in recent months.Deutsche Bank said guidance for operating income and profit margins from the group, which ranks second globally after Nike in sportswear sales, was “slightly weaker than expected.”
The company also pointed to the uncertainty caused by the expanding conflict in the Middle East that began with US-Israeli strikes on Iran and subsequent retaliatory attacks throughout the region.An Adidas franchise store in Israel was destroyed in an attack, though it was closed at the time and no employees were affected, a company executive told reporters during an earnings call.CEO Björn Gulden said there could be a “revenue impact” with stores closing in the region and air freight routes across the Middle East facing disruptions, which could lead to delays in product deliveries.
However, executives stressed that it was too early to assess the broader ramifications.“If you think about the last four or five years, we had COVID… then we had the Russian war… then we had tariffs that no one saw coming, and now we have the Middle East,” Golden said.“We have to be nerve-wracking, right? … I think our job as an administration is to try to maneuver the leadership as best we can.”Adidas has also faced pressure from US tariffs imposed under President Donald Trump, as many of its products are manufactured in Asian countries subject to the duties.The company will not immediately join companies seeking refunds after the US Supreme Court ruled that many global fees are illegal, said Harm Uhlmeyer, the company’s chief financial officer.He added: “We will wait and see.” “We never know what tariffs will be next week, whatever decisions will be made.”Following the court ruling, Trump moved to impose new 10 percent tariffs on imports under another legal framework.The company was also affected by the strength of the euro against the US dollar prior to the conflict in the Middle East, which led to a decline in the value of overseas earnings.Strong results for 2025 were overshadowed by cautious expectations. Adidas reported a 75 percent rise in net income to 1.34 billion euros, while sales increased by about five percent to 24.8 billion euros, driven by strong demand for shoes and clothing.Adidas also extended Golden’s contract until 2030, indicating confidence in his leadership.He took up his position in 2023 after the company cut ties with American rapper Kanye West, now known as Ye, following a backlash over anti-Semitic remarks. Adidas previously collaborated with West on its popular Yeezy training line.
