adidas AG

Q3 performance: strong growth and record profitability (good) - Net sales EUR 7.2bn (+7% currency-neutral, +9% reported / FX-positive). - Gross margin 54.3% (notably boosted by tariff refund dynamics; underlying discussed ~~51.5%). - Operating profit (EBIT) EUR 1.08bn (very high for Q3; +37% operating profit, record quarter). - Year-to-date: sales EUR 20.6bn (+10% reported / +11% currency-neutral), gross margin 52.7%, EBIT ~EUR 2.287bn (close to FY guidance).

Main drivers & strategy: sports-led momentum + local model (good/opportunity) - CEO highlights continued momentum after the World Cup, including reassurance despite concerns. - Performance is strengthening: +14% performance in Q3, with football, running, training growing strongest. - Lifestyle is mixed: lifestyle apparel grows, but lifestyle footwear remains difficult (discounting and market normalization needed). - Operating model: “global brand, local mindset” (local empowerment, local activations, and supply chain where needed). D2C described as the “heat” of the brand. - Channel mix: D2C strong (stores +16%, like-for-like +13%, e-com +18%), while wholesale only +2% (inventory in trade and selective newness in discount-heavy environment).

Tariffs & margins: surprising tailwind but with an important caveat (surprising/negative risk) - Gross margin improved materially due to ~EUR 200m tariff refund (refund of amounts previously paid; timing impact). - Underlying margin still disciplined: teams emphasized pricing/discount discipline; underlying gross margin estimated around ~51.5% in Q3 before the tariff impact. - Implication for investors: reported margin/EBIT strength includes timing effects, so trend sustainability depends on mix, FX, freight, and continued pricing discipline.