Adidas sees return to growth in Europe in fourth-quarter, confirms raised guidance

Oct 29 (Reuters) - German sportswear maker Adidas on Thursday said it expected Europe, its largest but worst-performing market, to return to growth in the last quarter of 2026, helped by delayed shipments moving into the period and higher wholesale sell-in.

Heavy discounting at many retailers due to high inventory levels and promotional activities led to a slowdown in Europe, with sales contracting in the third quarter. Europe accounts for almost a third of group sales.

"The timing shift of revenues and higher wholesale sell-in are expected to lead to high-single-digit growth in Europe in Q4," Adidas said in a statement.

The outlook for an improving business in Europe should reassure the market, JPMorgan analysts said in a note.

Shares in the company were up 2.5% in early Thursday trading.

Currency-neutral net sales in Europe fell by 4% to €2.24 billion ($2.50 billion) in the quarter. By contrast, Adidas sales grew by 12% in North America and 13% in Greater China, where it outperformed US rival Nike.

Nike sales in China have fallen for nine consecutive quarters and the brand has been turning to markets such as India as alternative profit drivers.

In its competition with Nike, Adidas has been investing in new styles, including the launch of its lightest‑ever racing shoe, the Adizero Adios Pro Evo 3, which helped Kenyan runner Sabastian Sawe to crack the two‑hour marathon barrier in April.

The group confirmed its previously released results for the third quarter and its raised guidance for the year, citing strong sales of its running and football lines.

Marketing and point-of-sale expenses were up 4% to €833 million, reflecting additional brand investments around the World Cup throughout July as well as normalizing marketing spend since August.

($1 = 0.8959 euros)

(Reporting by Linda Pasquini and Alessandro Parodi, Editing by Friederike Heine and Tomasz Janowski)