Adidas AG's shares rose 4% following the release of preliminary fourth-quarter results that showed a 10% currency-neutral growth, driven by a 13% increase in the Adidas brand's full-year performance. This marks the second consecutive year of such robust growth, with double-digit increases across all markets and channels. Despite challenges from higher tariffs and foreign exchange pressures, the company reported a 90 basis points gross margin beat, surpassing expectations.

The sportswear giant also announced a share buyback program of up to €1 billion for 2026, starting in February. This initiative, the first since 2022, is funded by strong cash flow and a robust balance sheet, reflecting management's confidence in the company's future. The operating margin for the quarter improved by 170 basis points year-over-year, although it met expectations. The gross margin, at 50.8%, was a standout, showing a 100 basis points improvement.

Analysts from Morgan Stanley described the preliminary results as "encouraging from both a quantitative and qualitative standpoint." The company plans to provide more detailed guidance during its full-year results presentation on March 4. This announcement comes as Adidas continues to navigate the post-Yeezy era, with growth excluding Yeezy products at 11%. The buyback program, estimated to boost EPS by up to 10 cents, signals a strategic shift in capital allocation.

Investors are watching Adidas closely as it reaffirms its market position without the Yeezy line. The buyback program and strong quarterly performance suggest a bullish outlook, potentially drawing more investor interest. With a focus on operational efficiency and market expansion, Adidas aims to sustain its growth trajectory, making it a key player to watch in the sportswear sector.