Adidas Shares Jump on Strong 2025 Results and €1 Billion Buyback

Adidas share price (ETR:ADS)  jumped 6% to €152.15 in morning trading today following the release of preliminary financial results that significantly exceeded market expectations, alongside the announcement of a substantial share buyback programme.

The rally represents a sharp reversal of fortunes for the German sportswear giant, though Adidas shares remains 9.11% lower year-to-date after a difficult start to 2026.

The Herzogenaurach-based company reported fourth quarter currency-neutral revenues for the Adidas brand increased 11%, reaching €6.076 billion compared to €5.965 billion in the prior year period. Excluding prior year Yeezy sales of approximately €50 million, the growth rate stood at 10%, demonstrating robust underlying momentum across the core business. More impressively, gross margin expanded by a full percentage point to 50.8%, while operating profit more than doubled to €164 million from just €57 million in the fourth quarter of 2024.

The full-year performance painted an even more compelling picture. Currency-neutral revenues for the Adidas brand climbed 13% for the second consecutive year, with double-digit growth recorded across all markets and channels. Total revenues reached a record €24.811 billion despite absorbing a negative currency translation impact exceeding €1 billion. When accounting for prior year Yeezy sales of around €650 million, the growth rate was 10%, still representing a strong performance in challenging macroeconomic conditions.

Profitability metrics showed substantial improvement throughout 2025. The gross margin expanded by 0.8 percentage points to 51.6%, a notable achievement given the headwinds from unfavorable currency movements and higher tariffs. Operating profit surged by more than €700 million to €2.056 billion, while the operating margin improved by 2.6 percentage points to 8.3%, up from 5.6% in 2024. This margin expansion underscores the quality of Adidas’s growth trajectory, driven by high full-price sell-throughs and disciplined promotional activity.

€1 Billion Share Buyback Signals Confidence

The standout announcement accompanying the results was the launch of a share buyback programme worth up to €1 billion. Commencing in early February 2026, the repurchase will be financed through anticipated strong cash flow generation throughout the year. The company intends to cancel all repurchased shares, which should provide earnings per share accretion and signal management’s confidence in the business outlook. The decision, approved by both the Executive Board and Supervisory Board, reflects the company’s robust fundamentals, healthy balance sheet, and strong cash generation capabilities.

Markets responded positively to the combination of strong operational performance and capital allocation discipline. The share buyback represents approximately 3% of Adidas’s current market capitalization, a meaningful commitment that demonstrates management’s belief that shares remain undervalued despite recent gains. The programme also provides a clear use of capital at a time when the company has successfully navigated the post-Yeezy transition and re-established momentum across its core product categories.

CEO Bjørn Gulden has overseen a remarkable turnaround since joining the company, focusing on brand elevation, product innovation, and operational efficiency. The consistent double-digit growth across all geographic markets and distribution channels validates the strategic direction, while the margin expansion demonstrates improved pricing power and cost discipline. The company’s ability to achieve these results while absorbing significant currency headwinds and tariff pressures further highlights the underlying strength of the business model.

Looking Ahead

Looking ahead, Adidas plans to publish its final audited financial results for 2025 and issue formal guidance for 2026 in the coming weeks. Markets will be particularly focused on management’s outlook for revenue growth, margin progression, and cash flow generation, especially given the uncertain macroeconomic backdrop and ongoing geopolitical tensions. The company’s decision to commit €1 billion to share buybacks suggests confidence in maintaining strong cash generation even while investing in growth initiatives.

The preliminary results demonstrate that Adidas has successfully completed its transformation phase and is now delivering consistent, profitable growth. With brand momentum accelerating, market share gains evident across key categories, and financial performance tracking ahead of expectations, the 6% share price gain appears justified by fundamentals rather than speculative positioning.