adidas (ADS) Q2 2025 earnings summary

Executive summary

• Achieved strong double-digit currency-neutral growth in Q2 and H1 2025, with the adidas brand up 14% in H1 and significant market share gains globally, despite the absence of Yeezy revenues.

• Gross margin improved to 51.7% in Q2 and 51.9% in H1, up 0.9pp year-over-year, reflecting strong sell-through, disciplined discounting, and lower product and freight costs.

• EBIT reached €546 million in Q2 (9.2% margin, up nearly 60%) and €1,156 million in H1 (9.6% margin, up 70%), with net income up 77% year-over-year.

• Record-breaking brand momentum and visibility at major sporting events, with strong operational leverage and normalized tax rates.

• Cash flows from operating activities were negative (€916 million outflow), mainly due to higher working capital investments and increased dividend payout.

Financial highlights

• Q2 2025 net sales reached €5,952 million, up 8% year-over-year (+12% currency neutral); H1 2025 net sales at €12,105 million, up 7% (+14% currency neutral).

• Gross margin at 51.7% in Q2 and 51.9% in H1, up 0.9pp year-over-year; underlying improvement of 120 bps excluding Yeezy.

• Operating overheads leveraged by 230 bps in Q2; working capital up 28% year-over-year, mainly due to inventory build for future growth and tariff-related logistics.

• Inventories increased 16% to €5,261 million; cash and cash equivalents fell 54% to €768 million.

• Adjusted net debt/EBITDA at 1.7x, supporting an S&P rating upgrade from A- to A.

Outlook and guidance

• Full-year 2025 guidance reaffirmed: double-digit net sales growth (currency neutral, excluding Yeezy), high single-digit reported growth, and operating profit of €1.7–1.8 billion.

• No Yeezy revenues or profits expected in 2025; prior year included €650 million in sales and €200 million in profit from Yeezy.

• Tariff increases expected to raise cost of goods sold by €200 million in H2, with mitigation actions ongoing.

• FX expected to be neutral in H2 and a tailwind in 2026 and 2027, especially from USD hedging.

• Strong order books for Q3/Q4 and early 2026; World Cup and major sporting events expected to drive incremental business.