adidas AG

Adidas (ADS.XETRA) has moved from a pre‑pandemic growth winner through a severe 2022–23 crisis (Russia exit, China weakness, Yeezy termination) into a 2024–26 early turnaround phase, with the stock recently around 158.7 as of February 22, 2026.

2019–early 2020: Late‑cycle winner, then COVID shock

• 2019 was a strong year for the stock, with roughly +59% annual performance, as investors leaned into global consumer and athletic‑wear growth and solid earnings.
• The narrative was straightforward: a quality growth and brand leader in a strong cycle, benefitting from athleisure and direct‑to‑consumer expansion, trading as a premium "global franchise" rather than a value name.
• Technically, shares trended strongly higher into early 2020 before the sharp COVID‑19 sell‑off in Q1 2020, which hit discretionary retail and Europe‑exposed names hard. ADS fell with the market but then started a brisk recovery as stimulus and reopening hopes appeared.

2020–2021: Pandemic whipsaw, then peak and stall

• 2020 full‑year performance ended modestly positive (~+2.8%), reflecting a huge drawdown in March followed by recovery as digital and North America demand offset store closures.
• 2021 saw a double‑digit stock decline (~−15%) even as revenues grew and margins remained decent, because supply‑chain cost inflation, factory lockdowns (Vietnam notably) and mounting China pressures began to erode profitability and confidence.
• The narrative shifted from "resilient structural grower" to "execution risk and regional drag." Investors began worrying about China, input cost inflation and whether adidas could keep pace with Nike and faster‑growing challengers.
• On the chart, ADS retested and slightly exceeded prior post‑COVID highs during the 2020–early 2021 reopening rally, then rolled over into a broad topping pattern and downtrend through late 2021 as earnings quality and guidance came into question.

2022: Russia exit, Yeezy shock, profit collapse

• In 2022, adidas reported that currency‑neutral revenues grew only 1% and operating profit fell 66% to €669m, with operating margin dropping from 9.4% to 3.0%, as higher supply‑chain costs, discounts and one‑off items hit results.
• Net income from continuing operations collapsed 83% to €254m, with about €350m of one‑off costs tied to winding down Russia, a settled legal dispute, customs risk provisions and restructuring. Inventories jumped 49% as demand and mix deteriorated.
• Key stock‑moving events included the decision to wind down the Russian business, the termination of the Yeezy partnership in late 2022 (which removed a highly profitable line, drove a ~€600m revenue hit in Q4 sales and created large inventory and write‑off risk), and ongoing deterioration in Greater China, where 2022 revenues fell 36% due to a tough market, company‑specific challenges and inventory takebacks.
• The narrative flipped decisively into "broken story / turnaround needed." The stock was treated as a problem name in global sportswear, with investors focused on missteps in China, Yeezy concentration risk, Russia exposure and bloated inventories.
• Technically, 2022 was a major downtrend year, with ADS losing ~−50% and breaking multiple multi‑year support levels; the chart showed persistent lower lows and only brief counter‑trend rallies.

2023: Management change, transition and inventory clean‑up

• Bjørn Gulden (ex‑Puma) became CEO from end‑2022, a change that was positively received as investors hoped for brand and margin recovery. The company explicitly labeled 2023 a "transition year" to reset inventories and build a base for 2024–2025.
• Guidance for 2023 called for high‑single‑digit revenue decline, inventory reduction and potentially around break‑even underlying operating profit, with an explicit warning that a full Yeezy write‑off could push the year into a sizeable operating loss.
• Yeezy remained central to the outlook: adidas indicated around €1.2bn revenue loss and ~€500m operating profit hit if existing Yeezy stock was not sold, plus up to €200m additional one‑off restructuring costs.
• The narrative evolved into an "early turnaround with big execution risk." Investors debated whether Gulden could rebuild brand heat, normalize China and monetize or exit Yeezy inventory without permanent damage.
• The stock began to recover from late‑2022 lows. 2023 saw a strong rebound (+~44% on the year) as expectations reset, sentiment improved around new leadership and visibility into inventory resolution and 2024–25 profit rebuild increased.
• Technically, 2023 marked a powerful base‑building and uptrend phase: after forming a multi‑month bottom near the low‑€100s, ADS broke out, posted higher highs and moved toward the upper part of its 3‑year range.

2024–Feb 2026: Yeezy decision, recovery and early Gulden era

• 2024 was another strong year for the stock (+~28.6%), supported by better‑than‑feared fundamentals, improved inventory balance and key strategic decisions, including the choice not to write off most of the remaining Yeezy inventory but instead to monetize it in a controlled way.
• Adidas stated that full‑year results exceeded its latest expectations when it decided not to write off most Yeezy stock, implying a sizable positive swing versus earlier downside scenarios that had contemplated up to €1bn in operating profit impact.
• The narrative by 2024 had shifted to "operational turnaround / margin repair," with focus on Gulden's back‑to‑basics strategy (product, core sports, wholesale partners and DTC balance) and the path from depressed 2022 margins back toward more normal profitability.
• Technically, ADS extended its uptrend, moving from its base area toward the upper end of its 5‑year range, with 5‑year extremes quoted between roughly €93.4 and €336.25. The stock rallied strongly but remained far below its pre‑2021 peak zone.
• Into 2025–early 2026, consensus estimates implied recovering sales (mid‑20s €bn) and earnings, with forward P/E and EV/sales multiples suggesting the market was paying again for growth but still discounting some execution risk.
• Sentiment settled into a balanced "turnaround compounder" view: not a high‑flyer, but a large, still‑valuable global brand working through the last Yeezy and China/Russia scars, with investors watching whether early Gulden‑era gains can sustain and justify the current price zone around 158.7 in February 2026.