Adidas AG (ADDYY) shares ended the last trading session 13.2% higher at $113.51. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 17.6% loss over the past four weeks.
The Adidas stock surged yesterday following President Donald Trump's announcement of a 90-day pause on higher tariffs for several nations, including Vietnam, that have refrained from retaliating against the U.S. The temporary relief benefits major apparel and footwear brands, as it covers key sourcing countries such as Vietnam, Indonesia, and Cambodia. These nations, critical to global supply chains, have shown interest in negotiating trade deals with the U.S., though uncertainty lingers until formal agreements are in place.
For Adidas, the move brings timely relief. Vietnam solidified its position as Adidas’ top sourcing nation in 2024, contributing 27% of the company’s total product volume, up from 26% in 2023. On a broader scale, Vietnam led global footwear production last year, accounting for 39% of output, followed by Indonesia at 32% and China at 14%. In garments, Cambodia topped the list with 23%, while Vietnam and China followed with 18% and 16%, respectively. The pause in tariffs offers Adidas a strategic window of stability amid an otherwise volatile trade environment.
This company is expected to post quarterly earnings of $1.13 per share in its upcoming report, which represents a year-over-year change of +117.3%. Revenues are expected to be $6.62 billion, up 11.8% from the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For Adidas, the consensus EPS estimate for the quarter has been revised 1.9% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on ADDYY going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Adidas is a member of the Zacks Shoes and Retail Apparel industry. One other stock in the same industry, Carter's (CRI), finished the last trading session 18.5% higher at $38.98. CRI has returned -20.7% over the past month.
Carter's' consensus EPS estimate for the upcoming report has changed -27.5% over the past month to $0.53. Compared to the company's year-ago EPS, this represents a change of -48%. Carter's currently boasts a Zacks Rank of #5 (Strong Sell).
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Adidas AG (ADDYY): Free Stock Analysis Report Carter's, Inc. (CRI): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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