Adidas Q3: Performance Footwear Grows 14% as Lifestyle Stalls

Adidas grew revenue 9% year over year in Q3, with direct-to-consumer (DTC) sales up 17%, even as its CEO described the lifestyle footwear market as saturated with discounts and difficult to plan for growth.

CEO Bjørn Gulden told analysts the company has posted net sales growth and an operating profit every quarter since Q1 2024. The biggest challenge facing the brand is not internal execution, he said, but the state of the market itself.

"The lifestyle footwear market is currently difficult and yes, you see a lot of discounts," Gulden said. "Of course it is difficult then to plan growth in the lifestyle footwear market currently. But that's why it's so important then to grow in the performance footwear market — and that's what we're doing."

What do the Q3 numbers show?

The split between Adidas' two footwear businesses widened in the quarter. Performance footwear grew 14% on a currency-neutral basis (a measure that strips out exchange-rate swings). Lifestyle footwear rose only 3%.

Footwear sales overall were flat in Q3, but the category still delivered 6% DTC growth, which Piper Sandler analysts said was "demonstrating continued end consumer demand."

The pattern matches what Nike reported a month earlier in its own Q3 earnings. Nike acknowledged it had oversupplied the Jordan brand and would pull back on launches going forward.

Why does excess supply matter?

The mechanism is straightforward. When brands ship more lifestyle product than consumers want, retailers clear the surplus through discounting. Discounts then drag down full-price sales across the category and make growth planning nearly impossible.

Gulden predicted the lifestyle market might improve in the back half of next year, but stressed the timing depends heavily on competitors' actions. "The market can only grow in footwear lifestyle when the market is clean," he said, meaning inventories have cleared to levels where full-price selling returns.

For now, demand sits with performance product.

Is the shift industrywide?

Data from Circana, published Monday, confirms it is. Lifestyle sneakers still accounted for the largest share of footwear sales in Q3, but performance footwear was "the industry's primary growth engine," according to the report.

Running is the main driver inside performance, "fueled by continued investment in wellness and active lifestyles," Circana found. Soccer and baseball footwear also grew.

For the holiday season, Circana expects overall footwear sales to come in roughly flat, as higher prices meet softer demand.

When will the lifestyle market recover?

Gulden framed the current softness as temporary, not structural.

"This will normalize again," Gulden said. "The inventories in the total market will come down, people will be more careful, and then when the supply is not higher than demand, the discounts will also disappear and ironically we will then all make more money. And that will happen because it always happens."

His logic: once supply falls below demand, discounting stops, full-price sell-through recovers, and margin follows. The correction, in his view, is a repeating cycle rather than a permanent shift in consumer taste.

How well is Adidas positioned until then?

Analysts see Adidas as comparatively well placed to ride out the discount cycle.

Telsey Advisory Group wrote last week that Adidas is "not immune to market and industry pressures," but is nonetheless managing solid brand momentum and full-price sell-through.

"Positively, the company has strength in performance footwear and in apparel to fill the gap and continue to deliver [high-single-digit] growth in 4Q26 and 2027," the Telsey analysts wrote. "In addition, Adidas' wholesale business stands to benefit from retail partners looking to offset weakness and supply reductions in Nike products."

That last point is a concrete tailwind: as Nike cuts Jordan and other lifestyle supply, retail partners need product to fill shelf space, and Adidas stands ready to supply it.

GlobalData analyst Louise Deglise-Favre argued the breadth of Adidas' range is itself a competitive asset. "Adidas has proved once again that it was able to capture consumer demand across the full breadth of sportswear," Deglise-Favre wrote, "from technical garments, running trainers or trendy streetwear pieces, without feeling dispersed or incoherent."

The near-term playbook for Adidas, and by extension the footwear market, is now visible: lean into performance and running while lifestyle inventories clear, absorb a flat holiday season, and wait for the discount cycle that Gulden insists always ends to end again.