Adidas Topped Earnings Estimates. Why the Stock Is Plummeting.

Adidas sources about 30% of its U.S. merchandise from Vietnam. (Justin Sullivan/Getty Images)

Adidas’ second-quarter earnings handily beat Wall Street’s estimates, but investors weren’t happy.

The stock fell Wednesday, reflecting disappointment over a sales miss and the company’s decision not to raise its full-year financial guidance, reflecting new tariff costs.

Adidas’ adjusted earnings of €2.03 ($2.33) a share for the quarter ended June were better than the FactSet consensus estimates calling for €1.93 a share. The company’s €5.95 billion in revenue, however, fell short of the Street’s projections for €6.2 billion.

The company’s shares, listed on the German stock exchange, were down about 10% toward the end of the trading day in Germany.

Adidas’ guidance wasn’t helping matters. The company reiterated its outlook for the fiscal year, rather than raising it as many analysts had hoped it would.

“With two good quarters behind, we had expected an increase, but Adidas cited the uncertain economic environment and an incremental €200MM impact from tariffs on U.S. imports in 2H25,” wrote Cristina Fernández, an analyst at Telsey Advisory Group.

Adidas is projecting sales to increase at a high-single-digit rate and for operating profit to increase further between €1.7 billion and €1.8 billion.

The outlook already factors in millions of tariff-related costs from earlier in the year, as well as up to €200 million in extra costs for U.S.-destined products during the rest of the year. Adidas sources about 30% of its U.S. merchandise from Vietnam, which recently struck a trade deal with the U.S. that institutes a 20% tariff rate on imports from the Asian country.

“The year has started great for us and normally we would now be very bullish in our outlook for the full year,” said CEO Bjørn Gulden in a press release. “We feel the volatility and uncertainty in the world does not make this prudent. We still do not know what the final tariffs in the U.S. will be.”

Gulden added that the company was also monitoring whether the tariffs would negatively affect consumer demand, particularly if the levies were to reignite inflation. If sales in the U.S. were to trend lower because of inflation, wholesale orders may be canceled or delayed, he said, which would negatively affect business.

Write to Sabrina Escobar at sabrina.escobar@barrons.com