Adidas shares surged more than 7% after the company reported stronger-than-expected first-quarter earnings, driven largely by robust early demand for football merchandise ahead of the upcoming FIFA World Cup in June. The German sportswear giant posted a currency-neutral sales increase of 14% to 6.6 billion euros in the January–March quarter, while operating profit rose 16% to 705 million euros. Both figures exceeded analyst expectations compiled by the company, which had forecast operating profit at around 647 million euros, according to reports cited from Reuters.

Market sentiment responded positively to the earnings beat, with Adidas shares trading at 147.55 euros at 1:33 pm GMT+2 on April 29, marking a 7.08% intraday gain. Investor confidence was further strengthened by strong early performance in key product categories, particularly football gear, which typically sees a surge in demand ahead of global tournaments such as the World Cup.

Chief Financial Officer Harm Ohlmeyer credited the company’s decision to frontload inventory as a key factor behind the strong quarterly growth. He noted that early stocking of World Cup-related merchandise helped avoid supply disruptions and enabled Adidas to fully capitalize on rising demand. He also said that without this strategy, the company would not have achieved double-digit sales growth in the quarter.

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Beyond football, Adidas also saw strong performance in its running segment, which recorded double-digit growth. The brand received an additional boost after Kenyan marathoner Sabastian Sawe completed a sub-two-hour marathon at the London Marathon while wearing Adidas racing shoes, further enhancing the company’s performance-oriented image in the global athletics market.

However, the company also flagged regional challenges, particularly in the Middle East, where sales declined due to ongoing geopolitical tensions, including disruptions linked to the Iran conflict. CEO Bjorn Gulden said store operations in some areas were affected by safety-related closures, describing conditions as highly unstable and changing frequently.

Despite these challenges, Adidas maintained a cautious approach to pricing, opting to avoid aggressive discounting in a volatile retail environment. The strategy contrasts with competitors such as Nike, which has reportedly taken a more promotional approach to manage inventory. Overall, Adidas’ strong earnings and World Cup-driven momentum have reinforced investor optimism, even amid broader geopolitical uncertainties.

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