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(Sharecast News) - Shares in Adidas fell sharply on Wednesday, despite a jump in annual sales and profits, after the German firm's growth forecasts disappointed.
The sportswear brand, known for its Samba and Spezial trainers, posted net sales of 24.8bn in the year to December end, a 4.8% improvement, with sales growth seen across all markets and divisions. Operating profits rocketed 53.8% to 2.06bn.
The group also confirmed it had extended the contract of chief executive Bjorn Gulden to 2030. Gulden joined in 2023 from rival Puma, tasked with righting the business during a turbulent period, including the ultimately ill-fated Yeezy partnership with Kanye West.
On Wednesday, Gulden said 2025 had been "much better that we had planned and expected when the year started".
He continued: "The double-digit growth in all markets and channels is of course very pleasing, but even more important than this is quality growth. Our markets have been very good at managing that the right product in the right amount has been sold in their market, and that we have managed to keep full-price sell throughs high and discounts under control."
Looking to the current year, and Gulden forecast high single digit growth on a constant currency basis, which would add another 2bn in revenues. Operating profits were slated to increase to around 2.3bn, despite a 400m hit from US tariffs and negative forex effects.
However, that disappointed the market, which had been looking for earnings before interest and taxes of around 2.7bn this year, and as at 1145 GMT, the Frankfurt stock had shed 7%.
Gulden, who is targeting an operating margin of more than 10% by 2028, said: "We now have to further reduce complexity, put decision making closer to the consumer and where the knowledge sits, and make sure we optimise our systems, processes and organisation to the new reality in the global market.
"I look forward to this journey."
Russ Mould, investment director at AJ Bell, said: "The market is doubtful of whether the strategy of leaning on Adidas' retro brands can continue to be successful.
"Gulden's initial moves, which include restoring relationships with wholesalers and moving away from a focus on direct-to-consumer sales, have helped. With at least four years left in the top job, the most difficult steps still look to be ahead of him."