Adidas

Adidas in early 2026 sits in the awkward middle of a turnaround that everyone has already priced in. CEO Bjørn Gulden, who took over from Kasper Rorsted in January 2023, inherited two crises at once: the Yeezy collapse that wiped out roughly €1.2 billion in expected operating profit, and a brand that had drifted from sport culture into a generic mid-market sneaker maker. His response was deliberately old-school — flood the market with Samba, Gazelle and Handball Spezial, lean into the soccer category around UEFA Euro 2024, and let the retro wave do the marketing for him.

It worked. Revenue recovered from €21.4 billion in 2023 to roughly €23.7 billion in 2025e, gross margin moved back above 50%, and operating margin climbed from 1.3% in 2023 (Yeezy-loaded) to about 8% in 2025. The Yeezy inventory was fully sold through by mid-2024 with cumulative net proceeds of around €750 million, of which roughly €240 million was donated to anti-hate-speech organizations. The stock more than doubled from its October 2022 lows.

The harder question for 2026 is what comes after Samba. Footwear cycles in this category typically run 24-36 months; Samba peaked in 2024 and is now visibly cooling in resale data. Gulden's bet is that pipeline products — the rebuilt Predator soccer boot, the Adizero running franchise, the FX Originals collection and a renewed push in China — can carry the brand without a single hero silhouette. The bull case calls this normalization; the bear case calls it the post-fad hangover Nike just lived through.

Institutional positioning on Adidas is split between cyclical turnaround funds and consumer-cycle skeptics. Groupe Bruxelles Lambert (the Frère family vehicle) has held a long-term position and has not trimmed materially through the run, which is a meaningful tell on Gulden specifically — Frère also helped recruit him from Puma. European long-only houses including DWS and Amundi added through 2023-2024, while several US growth funds that had been over-indexed on Nike rotated a portion into Adidas in 2024-2025. On the short side, fundamental shops including Bridgewater pure-alpha and several London-based long/short funds have flagged the valuation as priced for perfection, with elevated short interest entering 2026. Brevan Howard and Marshall Wace have rotated around the position multiple times. The absence of a true activist is informative — the strategy is already shareholder-friendly under Gulden, leaving little classic activist lever to pull.

Adidas trades at approximately 25-28x forward earnings, 13x EV/EBITDA and 1.9x EV/sales going into 2026 — a clear premium to Nike at 19x earnings and to Puma at 18x. The premium is justified relative to where Adidas was 24 months ago, when the Yeezy-related losses made earnings essentially meaningless, but is no longer cheap on absolute terms. Bull case (operating margin to 11% by 2027, low-double-digit revenue growth, China sustained recovery): fair value €280-320. Base case (8-9% margin, mid-single-digit growth, modest China contribution): €220-250 — roughly today's price. Bear case (Samba aftermath, Nike comeback, tariff drag): €160-180. The market is pricing the base-to-bull bridge, leaving little margin of safety.

1. March 5, 2026: Full-year 2025 results and detailed 2026 guidance. Watch for explicit 2027 margin reaffirmation, China currency-neutral growth, and any commentary on the next product pipeline beyond Samba/Gazelle.
2. May 6, 2026: Q1 2026 results — first clean comparison quarter without Yeezy distortion. Soccer category trends ahead of UEFA Champions League final and 2026 FIFA World Cup marketing kickoff will be the key signal.
3. June-July 2026: 2026 FIFA World Cup in USA/Canada/Mexico. Adidas sponsors the official match ball and 12 federations including Argentina, Germany, Spain and Japan. Brand-heat read-through to back-to-school 2026 sell-in.

I find Adidas one of the more interesting consumer turnarounds to watch but a difficult one to own at this price. Gulden has done everything right operationally: rebuilt the wholesale channel, restored brand heat, navigated the Yeezy crisis without taking shortcuts, and brought margins back to credible territory. What worries me is that the easy gains — the retro sneaker wave, the post-Yeezy comparison base — are now in the numbers. The 2026 story has to come from genuine product innovation in soccer and running, where Adidas is still chasing.

If I were positioning today, I would rather wait for a single weak quarter that brings the multiple back to the low-20s before committing. The asymmetry on a clean miss is more attractive than chasing the current setup. For long-term holders who already own from the 2022-2023 lows, the FIFA World Cup catalyst plus the China rebuild gives a reasonable hold; for new positions, patience pays.