Adidas Soars on Sneaker Surge: A Stock to Watch in 2025

Adidas just delivered a performance that even the most bullish investors might have doubted. The German sportswear giant reported Q1 2025 revenue of €6.15 billion, a 13% year-over-year jump, while operating profit more than doubled to €610 million, crushing estimates. This isn’t just a blip—it’s a clear signal that Adidas is back on top of the sneaker game. Let’s dig into what’s driving this momentum and why investors should take notice.

The Numbers Don’t Lie: Adidas Is Firing on All Cylinders

The headline stats are staggering. Excluding the controversial Yeezy sales (now fully exited by year-end 2024), currency-neutral revenue for the Adidas brand rose 17%, with double-digit growth across every region and channel. Gross margin expanded to 52.1%, up 0.9 points year-over-year, while operating margin hit 9.9%, nearly doubling from 6.2% in Q1 2024. These aren’t just figures—they’re proof that CEO Bjørn Gulden’s strategy to simplify operations and refocus on core brands is paying off.

Why Sneakers Are the Engine Here

Adidas’ success hinges on its product innovation and localized execution:

1. Nostalgia Meets Tech: The SL72, a retro-inspired running shoe, and Adizero Ubersonic (a tennis shoe breaking records) are resonating with sneakerheads. Meanwhile, the Climacool, a 3D-printed design, showcases cutting-edge tech. These aren’t just shoes—they’re cultural touchstones driving full-price sales and reducing discounting.

2. Global, But Hyper-Local: Adidas is ditching one-size-fits-all strategies. By cutting 500 “obsolete” roles at HQ, the company is empowering regional teams to tailor products. In North America, the Crazyquick padel shoe and localized collaborations (e.g., Texas Tech University) are fueling a 15% sales rebound. In Europe, UEFA Euro 2024-themed Predator boots and retro-running lines are boosting demand.

3. Collaborations That Pop: Partnerships with stars like Bad Bunny and brands like Wales Bonner create buzz. Limited-edition drops of the F50 Two Horizons (a football shoe) and Stella McCartney’s vegan designs keep shelves empty and Instagram feeds full.

The Margins Are the Real Story

Adidas isn’t just selling more—it’s making more per sale. Gross margin for the Adidas brand jumped 1.6 points in Q1, thanks to better pricing, reduced freight costs, and a healthier inventory mix (€5.0 billion as of 2024). Operating profit hit €610 million, blowing past forecasts of €545 million. This isn’t a flash in the pan: the company now aims for €1.7–1.8 billion in annual operating profit, up from €1.5 billion in 2024.

But Wait—What Could Go Wrong?

No investment is risk-free. Adidas faces geopolitical headwinds (e.g., tariffs on Chinese-made goods) and competitive pressure from Nike and disruptors like On Running. Analysts also warn that iconic styles like the Gazelle might be nearing saturation. However, CEO Gulden’s focus on low-profile sneakers (e.g., Tokyo/Japan lines) and agile inventory management suggest the company is ahead of these risks.

The Bottom Line: This Is a Stock to Buy—and Hold

Adidas is proving that brand strength and operational discipline can dominate in a volatile market. With double-digit growth across all regions, a clean break from Yeezy, and margins hitting 9.9%, this isn’t just a recovery—it’s a new era.

The numbers back it up:
- Revenue growth: 17% (Adidas brand, ex-Yeezy) in Q1.
- Operating margin: Up 370 basis points year-over-year.
- Analyst sentiment: 21 “buy” ratings vs. 4 “sell”.

While Adidas’ 2025 sales target of high-single-digit growth is conservative, its share price is up 22% YTD, and with €5 billion in cash, it’s primed to outspend rivals on innovation.

Final Call: Adidas is no longer playing catch-up—it’s leading the pack. With sneakers as its rocket fuel and execution as its engine, this stock isn’t just a bet on fashion—it’s a bet on resilience in motion. Buckle up, investors: the ride’s just beginning.

Data as of April 2025. Past performance does not guarantee future results.