Adidas Q3 results show performance outrunning lifestyle

By James Calloway

Adidas reported 9% year-over-year revenue growth last week, while direct-to-consumer sales increased 17% in Q3. Adidas said the Q3 results matched its preliminary expectations for record sales and profits.

CEO Bjørn Gulden told analysts that net sales had grown in every quarter since Q1 2024. Adidas also recorded operating profit in each quarter of that period. Gulden described conditions in the broader market as the company's biggest current challenge.

What drove Adidas' Q3 growth?

Adidas' performance category grew 14% on a currency-neutral basis in Q3. Lifestyle footwear rose 3%, according to the company. Gulden said discounting made the lifestyle market difficult to plan around. He said Adidas needed to grow in performance footwear while that weakness persisted.

Those results reflected a trend Nike identified in its own Q3 earnings one month earlier. Nike said it had oversupplied the Jordan brand and would pull back on future launches. Gulden expected the lifestyle market might improve in the back half of next year, but said the timing depends on Adidas' competitors.

Gulden set out the industry's needed condition: “The market can only grow in footwear lifestyle when the market is clean.” He said the pace of improvement would depend on competitors' actions.

What does Circana data show?

Circana's Monday report found that lifestyle sneakers still accounted for the largest share of footwear sales in Q3. Yet performance footwear was “the industry's primary growth engine,” according to Circana.

Running drove performance growth, according to Circana, which linked the category's momentum to continued investment in wellness and active lifestyles. Soccer and baseball also grew. For the holiday season, Circana expects overall footwear sales to be roughly flat because of higher prices and softer demand.

When can lifestyle footwear normalize?

Gulden maintained that softer lifestyle trends were temporary. He said total-market inventories would come down and people would become more careful. Once supply no longer exceeded demand, discounts would disappear and industry profits would rise, he said. He added that the cycle had always happened before and would happen again.

Circana's roughly flat holiday forecast leaves little room for broad market growth. Its data puts performance footwear at the center of industry growth, while lifestyle remains constrained by discounting.

How well positioned is Adidas?

Last week, Telsey Advisory Group said Adidas was not immune to market and industry pressures. The analysts said the company was managing solid brand momentum and full-price sell-through. They also said strength in performance footwear and apparel could fill the gap and deliver high-single-digit growth in 4Q26 and 2027.

Telsey added that Adidas' wholesale business could benefit as retail partners sought to offset weakness and supply reductions in Nike products.

Against that backdrop, Piper Sandler noted that Adidas' overall footwear sales were flat in Q3, even as footwear DTC grew 6%. The analysts called that gain evidence of continued end-consumer demand. The 6% rate applies to footwear, separate from Adidas' 17% companywide DTC increase.

GlobalData analyst Louise Deglise-Favre said Adidas had captured consumer demand across technical garments, running trainers and trendy streetwear. She said the company did so without becoming dispersed or incoherent.

Adidas enters the holiday period with 17% companywide DTC growth and 14% performance growth. Telsey projects high-single-digit growth in 4Q26 and 2027, supported by performance footwear and apparel. The next test is whether wholesale demand can offset lifestyle discounting before inventories normalize. Gulden predicted the lifestyle market might improve in the back half of next year, but tied its pace to competitors.