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adidas held full price all year, matched inventory to demand, and expanded gross margin **120 basis points** to **51.2%**.
€24.1 billion
for 2025 and raised its 2026 operating profit guidance…
€1.8-1.9 billion
a roughly
10% increase
from prior outlook
120 basis points
year-over-year to
adidas posted record revenues of €24.1 billion for 2025 and raised its 2026 operating profit guidance to a range of €1.8-1.9 billion, a roughly 10% increase from prior outlook, according to the company's January 2026 earnings release. The Herzogenaurach-based brand attributed the performance to sustained demand across footwear and apparel, disciplined inventory management, and consistent full-price selling that protected gross margin throughout the year.
The company ran fewer promotions than prior years and held firm on recommended retail prices across key franchises including Samba, Gazelle, and Ultraboost, even as competitor promotional activity increased during holiday 2025. Management noted that promotional depth in the marketplace did not pressure adidas to discount, because inventory was tightly matched to demand and product turnover remained high. The result: gross margin expanded 120 basis points year-over-year to 51.2%, per the earnings deck.
This works because full-price selling compounds margin and signals scarcity. When a brand holds price while peers discount, the market reads it as confidence in product quality and limited supply. Consumers who might have waited for a sale instead buy at full freight, fearing stockouts. Retailers follow the same logic: if the brand does not flood the channel with markdown allowances, they preserve shelf price and protect their own margin. The mechanism is not willpower; it is inventory control that removes the need to clear product through promotion.
A small physical-product brand can copy this play without adidas scale. Start by setting a production run that undershoots expected demand by 15-20%. Order fewer units than your best-case forecast. Use pre-orders or waitlists to gauge real intent, then manufacture to that number plus a modest buffer, not to aspirational reach. Publish a restock calendar if you sell a hero SKU, so buyers know the next batch ships in six weeks, not tomorrow. When you hit 70% sell-through, do not discount the tail; instead, bundle it with a new release at full price or hold it for a future limited drop. If a retailer requests a markdown co-op, offer them an exclusive colorway at the same margin instead. This keeps your brand out of the sale section and trains customers to buy on release.
The broader pattern is margin before volume. adidas proved that holding price through a full fiscal year, even during a promotional fourth quarter, drives both revenue growth and profit expansion when the inventory engine is tight. For any brand selling a physical product, the trade-off is not sales versus margin; it is discipline today versus channel fatigue tomorrow.
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