Adidas Stocks Crash After Record Sales Miss Analyst Expectations

Adidas stock plummeted by an unprecedented 18.8% in a single trading session on Thursday, marking its steepest one-day decline since its initial public offering in November 1995.

The sudden drop came despite the company delivering its highest quarterly net sales in its 76-year history, with second-quarter revenue reaching €6.74 billion ($7.71 billion), a 13.3% rise in reported euro terms and 14% on a currency-neutral basis.

However, this top-line number concealed the massive cost structure underneath it, with marketing and point-of-sale expenses for the quarter reaching an eye-watering €924 million (approximately $1.06 billion), equal to 13.7% of net sales and up from 12.0% a year earlier.

The result was an operating profit of €574 million ($656 million), which came in modestly below expectations, and an operating margin contraction to 8.5%, down from 9.2% a year earlier.