Ladies and gentlemen, welcome to the adidas AG Q1 2026 conference call and live webcast. I'm Maura, the callers call operator. I would like to remind that the all participants will be listen-only mode and the conference is been recorded. Presentation will be followed by a Q&A session. You can write your several question at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must have been recorded for publication or broadcast. At this time, it's my pleasure to hand over to Sebastian Steffen, Head of Investor Relations. Please go ahead. Yeah, thanks very much, Maura, hello everyone, welcome to our Q1 results conference call. Along with me here today are our CEO, Bjørn Gulden, and our CFO, Harm Ohlmeyer. You know the drill. First, Bjørn and Harm will take you through the puts and takes of the quarter and our outlook, then of course, we will open up the floor to your questions. As always, during the Q&A session, please limit your questions to two to allow as many people as possible to ask a question. Before we kick it off, there's actually one more thing I would like to mention. I guess we all witnessed a very historic sports moment on Sunday at the London Marathon. I have to say I still get goosebumps when I think about it and when I think about the visit of these fantastic athletes here at our campus yesterday. Bjørn is actually going to talk about it in more detail in a second. What I wanted to share with you is that there will actually be a documentary about the Sub2 journey going live tomorrow afternoon. It shows in a very impressive way that these huge achievements have not been reached by luck, that there's actually a lot of hard work by a lot of great people behind it. Of course, we wanted to make sure that you get a sneak preview of it. That's why we put together a trailer very quickly yesterday that we're going to show you now. Enjoy. [Presentation] I hope you enjoyed it. I hope you accept that we brag a little bit because as you probably understand, for us, the achievement of the weekend meant a lot. It's the result of many, many months, if not years of work, from a product point of view, from a marketing point of view, and from an athlete's training. Just for you, we have doping tested him twice a week for the last 26 weeks, so there shouldn't be any doubt that this is very, very serious. When you see what the three did, it becomes even more impressive. Just also commerciality, of course, this is not a shoe where we expect to sell thousands of pairs, but the demand is actually thousands of pairs. If you go on StockX, I think the last price that I saw now was EUR 5,000. Of course that tells you there is a curiosity, what is this. I think for the business, you should also be a little bit impressed when you look at what happened after the race. There are some visuals here, where we were able to, in London, two and a half hours after the race, to be, I think, at 350 spots with outdoor advertising with even the time. All over the world, like you see here, I think it's Shanghai you see here, with big visuals with the time, and of course the visual of the athlete or the athletes. Again, in my life, when it gets to planning something, when it gets to executing something and then actually enjoying it, I think this is a highlight because it's of course historic. Good is also, and we should never forget that the company is also having a great reputation in many, what should I say, target groups, being employers or future employees or, you know, reputation of the brand. You see some of them here. Again, this is not because we're doing something great today, but it's of course accumulated what adidas have done over many, many years. It is, you know, a fantastic place to work, and we also hope it's going to be a fantastic place again to invest. That's up to you guys. We have, and I know some of this is repetitive, but we have talked about that this is the fourth year of a four years plan. We defined 2026 to be a healthy company. I think we have added successful. I do think when we look into this year, we've had a great start. Not only the numbers that we will get to in a second, but the achievements of our athletes, the visibility of our athletes, the way we have been in marketing, in social media, and I think also the energy that we have internally is at least the highest that I have seen at the time that I have been in my two phases in the company. The numbers you have probably seen and analyzed them. A growth in Q1 around 14% is I think, very strong. I think it proves that the product we have in the marketplace is in demand of the consumer. You will see that also in the growth margin. Then I will remind you again that to accelerate our receipts early to make sure that we had the right amount of product and maybe a little bit too much for the sales, but to have, what should I say, reserve, in the issues now of supply again, was very, very smart. So in World Cup soccer, if it was balls or it was home wear jerseys, we front-loaded. I think with all the issues right now in the world, that was actually a good strategy instead of trying to optimize the working capital. The profit also of EUR 705, I'm sure Harm can comment on it, must be one of the highest that we ever had. Adding EUR 100 million operating profit compared to last year is very nice to actually achieve. If you then look at the P&L top line, we talked about 14% growth, currency neutral. It's the first time you don't see anything that this is only for adidas brand. Remember, this is the first time there's no Yeezy comparison in the numbers. That's why you have one simple number, that is up 14%. A gross margin of 51.1 is, yes, down 100 basis points. The underlying gross margin is actually up, but the currency, the tariffs are working against it. My friend Harm will take you through that more in the details. From a sell out and an achieved gross margin, very, very healthy in Q1. That gives you then the 10.7% operating margin and EUR 705 million operating profit. You then look where the growth is coming from, you know, our map, 12% out of the U.S., again, in a very, I would say, nervous market when it gets to consumer demand, oil prices being high, and of course, also a lot of discounting. We are very happy with that number. You know, that we admit that the U.S. is for us, of course, the biggest opportunity over a long period because we are so far behind our competitor. Again, for this quarter, we say this is good. Europe, probably a market that is currently not growing at all. Here with +6%, we are happy. You have to remember we had a 20% growth in Q1 last year, it's the same thing here, especially in lifestyle footwear. The market is over-inventoried, a lot of discounts, it's hard right now to grow on full price. Great growth on apparel and also good growth in performance. Greater China, no change. Great momentum, great energy, great sell-through, we have approved that our concept and our team works. Same with South Korea and Japan. Great first quarter. Have to say that especially South Korea is leading on trend, actually having strong growth in both footwear and apparel. I don't think the discount area is so high in this part of the world. A very positive development on all counts. LatAm, still on fire, now fueled also by the World Cup. Fantastic reaction to everything in the LatAm countries. You know that we are now number one in the region, and that is, of course, not only because of the business model, but also because of a great team. We think that the World Cup will make it even greater. Emerging markets, you know, which also includes the Middle East. Needless to say, 10 of the markets involved in the conflict. Of course, we are losing business in these countries, mainly in the last four or five weeks. There are still issues that are very volatile. Sometimes stores are closed. There are some problems getting products in. I do think we can discuss that later, what this could mean going forward, depending how long this conflict would last. As you know, all the numbers that we have shown you includes the issues in the regions. Also here, a great job by the team. That gives you then the 14% growth and almost the EUR 6.6 billion top line. If you look at channel, 8% growth in the B2B or wholesale, 19 in our own stores, and 25 in e-com. This is fully in line with what we told you a quarter ago that in this market, especially in Europe and America, where it is over-inventoried, having a strong discipline in how we actually flow products and how much we sell into the trade has been important. Therefore, the growth in both our stores, which are double-digit up like for like, both in factory outlets and concept stores, is then of course important, and also e-com. This is not a strategy for us that D2C should grow faster than wholesale, but it is a result right now of how the market is, and that might change. We would love again to have a less volatile wholesale business, but it shows you that the brand, when it's presented full price or discounted as a brand, works very well and D2C being extremely strong. I would also say, the e-com business, I said it last time, we feel now that we are a good e-com player. Both from a system and an app point of view, but also, of course, from the flow of product and the way we present it. That gives you the 62-38 split, and as you can see on retail, being 22 and e-com 16, surely a healthy split. Again, not huge changes, because it's only, you know, the changes of a quarter. We continue to spend quite some energy and money on our retail environment. You see some of them here. Very important for us to have freshness in our products. Very important for us that we target the consumer in the different areas with the right product. As you can see there, even in the store layout and the way we actually are making the front, there are big regional differences, depending on what the market is. We still believe very, very strongly to adapt to the local culture and not try to have one store design all over the world looks the same. Same is in e-com. As I said many times, the frame and the system are the same. We have a very, very good global e-com team that works on that. How we are then fronting the consumer with what programs on the front page and the sort of the different concepts are then, what should I say, targeting the consumer in different markets. Here you see some of the differences, from the left side where, you know, we very much target the World Cup in the U.S., the retro product, to in the right corner where you have a typical Japanese approach. Again, of course, this is a dynamic process, but I think we have optimized the way we do it in a way that we feel it really working. You also see that in the digital growth we have. I would also say that in apparel, where you see the fantastic growth, it's also obvious that it's easier today to sell a lot of new, fresh apparel digital than it is in a brick-and-mortar just because of the fact that you can bring newness, both in your own e-com and with your digital product quicker than you can do on a normal brick-and-mortar concept. Footwear only growing 4%, apparel growing 31%, and accessory growing 13%. You might think that the 4% is weak, I would say it's not. It tells you that footwear right now is in process of being more discounted, and especially in the lifestyle area, there are lack of newness and lack of energy, and the stores, especially in Europe and America are, what should I say? I would say merchandised with a lot of discount, so it's difficult to get the energy that we've had before. It's great to see that the performance categories then are actually taking off. We clearly see that there is a big demand for many categories, including running and also soccer for the time being. Apparel, we told you six months ago that we expect a huge growth in apparel because we know that the apparel team has developed new trendy concepts, used new materials, and been, in many cases, leading. As I also said, especially our digital partners had a huge central success with our apparel. When you then add all the World Cup products and the soccer cultures into it starts to be a substantial growth. We'd also like to tell you that both training and running as performance categories are also starting to grow in apparel, which of course is very important for the future. The accessory numbers has been, you know, volatile and very negative in the U.S. because of the delivery problems we had into them. You remember we had a China issue. As you can see now, we have healthy growth again, of course, fueled also by World Cup product. But the problems we've had, especially in the U.S. accessories, starting to be fixed. I hope and believe that these numbers then will continue to grow also in the U.S. That gives you the 56/37/7 split, which is not very different than we had before. Again, I think under the current market environment, this is a very healthy split. If you then look at performance, we are showing a 29% growth. I think this is the second quarter where we have a huge growth in performance. Of course, those of you who said this is not dangerous to grow only in lifestyle, now you have the answer. The plan was then to shift the growth also into performance. Of course, there is always the goal of having balance between the two. Now having such a growth in performance is of course a great, what should I say, feedback for us, that we have spent time on financing, you know, growth in lifestyle and brand heat to put it then into development of the right product and better distribution of our performance categories. Football, of course, great growth, as expected. Again, also probably helped that we have been very good in supply. Running, continuing at almost 30%, again, and this is before the success in London. We see that we're getting both in retail and wholesale, a great momentum in running. As you know, there is a globally running boom. Training also starting and continuing to get 12% or double-digit growth. The only negative number here, is the basketball number. We have to remember that Q1 is a small basketball quarter, you also know that we have told you that we need time to turn that business to make it, you know, better. You also probably know that basketball culture right now, especially in the lifestyle area, is not hot in demand. Actually according to what we planned. The other thing you need to note here is, of course, the great number in motorsport. That of course has to do that a year ago, we had one team with Mercedes, now we have two, added Audi. I think it's fair to say that motorsport so far is more than hitting our expectation. A, I think because we've done a decent job, and B, we clearly see that there is a great demand in fan gear and also culturally coming out of Formula One. A very positive number for us in the golf market that has been stagnated. Again, very, very happy with the performance side of it. We have for a while said that we wanna be like adidas, invest in many sports and be visible in many sports. There are four categories that is important for us to win globally. That is football, DNA of the brand. It's running because it's the biggest. It's training because it's relevant all over the world. Basketball because it is culturally really relevant, especially in the U.S. Although the category is struggling a little bit currently, it is of course important for us in the future. I hope you agree and see that we are very, very good on the road in football. I would say in all elements of it, we bring innovation. You see here the first printed additive soccer shoe that has been on the market. You see soccer cleats that has the elements of fashion. You see culture wear and you see the lightest speed shoe on the market. In general, I think our sports marketing have done a great job finding the right players. Those of you who saw FC Bayern München against Paris Saint-Germain yesterday, it is a fantastic sport, and we look forward to the return game next week. Running, we have talked about the importance. We have worked for three years with very, very good teams on innovation. It's not only for the top of the market, but also for the everyday running market. We have new technologies that are starting to break through. There's many elements that now is helping us on the performance side. Training. We have for the first time also a hybrid shoe in the market that is doing extremely well, not only in competition, but now also building a huge order reserve. We believe in this category and are putting quite some innovation to build the best product available. So far, we see actually success in all region in this area, which is very interesting coming from a training area. Basketball, where we told you we need to reset the business. We are working on new signature shoes. We are working on signing new players. You will see that when we get to the NBA draft. We are working on a bigger presence in women's basketball, and you will also see that we're signing clubs and federation outside of the U.S. Basketball, although it will take some time, it's clearly in our priority. Motorsport, we talked about. Don't need to explain any of the success of Mercedes. They're back where they belong. I hope you see that both Kimi and George is extremely loyal to our brand. We also do a lot for them. Here you see when they were in Japan, they were actually racing in Y-3 suits. Toto Wolff even was willing to be a model for our Y-3 show. The relationship to Mercedes Formula One is just fantastic. I have to say the same about Audi. Of course, not as good on the track yet, but our neighbor, 100 kilometers from here, looking great in merchandise. We also run their e-com site, so we are a business partner on a wider scale than just doing merchandise and selling it. We believe that this relationship is going to be a great one, and it's already way ahead of the commercial plans that we had. Then in the, what should I say, soul of Adi Dassler, we are back again focusing and also on the smaller sports, on the local sports. Some of them commercial, others not. I would like to mention Padel, which you see here. I think we now are market leader in Padel, also in rackets. It's a booming sport that of course is attracting athletes, female and male, kids and adults, in a way that we didn't believe would happen. A great new segment. The mirror to that in the U.S. is pickle, where we are not that successful yet, but we see the same trend. We talked about other sports, like cricket, important for us. You see a new signage of volleyball in Turkey. Our sports marketing and business teams are very, very agile, looking for the opportunity to both build the credibility, authenticity, and also commercial businesses. The ones we have talked most about is, of course, America. We bragged about that we had both a college team in the NCAA final, which we then of course won. We can now brag that, you know, Mendoza, our quarterback, was the first draft pick, which of course, normally indicates a new superstar. I think we had 15 players in the first and second round, showcasing a much better activity in the NFL draft than we ever have had. It's not only NFL, it's also NBA, and it's softball, it's volleyball, it's baseball. Our local team is invested in credibility to be a real sports brand again in the U.S., also for the kids. I told you many times that it will take some time, but I think we are able now to sign because we have the resources. If you give us a little bit of time, I think we will grow to be a much, much, much more visible sports brand also in the U.S., which of course is the mid-term target. We have, every time we've spoken, talked a lot about innovation. I think many of you thought we were lacking innovation. I think I've told you that I disagree. Of course, to bring ideas and concept to commercial product takes some time. You see some of them here. We talked about the Evo 3, world's fastest shoe for marathon. We have told you that we need a foam for comfort. That's Hyperboost, which has just been launched in running, and that you will see extension on. We'll have the F50 Hyperboost hitting the market next week, which is the lightest soccer shoe on the market. We have, you know, the Adizero Prime X Evo "Ultra Charge", which is a technology that people have never seen before. We have the hybrid training shoe. Then we have something that we're really proud of. We have built the first adaptive shoe, which is a running shoe for the adaptive athlete or some would call it, athletes with disability. Again, the reaction to this, you know, from parents, for example, with the Down syndrome, has been fantastic. We're working very closely with these athletes then to make them better athletes and also give them much more comfort when they do sport. Then the whole printed technology. You know, we have with Climacool printed shoes there for the leisure wear, cool stuff. That should work or that works. Now we are taking the technologies also in the stadium and on the arena. You will see basketball shoes and soccer shoes now being printed for the athlete, which is a very, very cool concept, and I think just the start of what you will see for the future. Again, the whole performance footwear is, of course, important for us. I do think that you will see that the pipeline is really, really good, and that many of the things that are coming out of innovation pipeline for the athlete is also then going commercial, which of course, at the end of the day is the reason why we're doing it. It's not only footwear, it's also apparel. Yes, I think innovation in apparel has been smaller in general industry. If you watched the marathon in London, you would have seen that our athlete was either running in the Climacool, what you see here, with kind of the bubbles in the material, which helps them keep cool longer, or in the Techfit suit or combinations, which you see here with Yomif Kejelcha. These are all technologies that we have developed together with the athletes to make them better. Of course, they will also then show up in commercial products. For other sports, it's the combination of coolness or heating, depending on what sports you are. If you watch Formula One, you must have seen the coolness system that George and Kimi Antonelli is using. I think you will see some of that also even when we get into World Cup, which we know will be very, very, very, very hot. Innovation was important. I think the visibility of what we did in the weekend will of course also help us when it gets to the commerciality. We feel that we have a great pipeline, and that's why we are going to invite you in September, I think it's the 23rd and the 24th, where we will show you from the lab to the commerciality, what we're working on, not hide anything because you will not tell anybody. We will show the confidence we have also after the World Cup to be present at all sports event going forward with very innovative and competitive products. One thing that we have not been good at, we've talked about this before, is comfort. I think that other brands have been much, much better in actually translating comfort into performance and lifestyle. We talked to you that Adi did that great 10, 15 years ago with Boost, which was the most comfortable midsole material. Remember Adi Boost? You remember the NMD. You also remember that Yeezy, all successful running silhouettes had Boost in them. Problem with Boost is that it was too heavy. That's why the brief was make a Boost that is light, and that's Hyperboost. We launched, you know, the first generation of Hyperboost Edge four weeks ago. Smaller volumes, great reaction. You will start to see colors and more models with Hyperboost coming to the market as we go, both in the performance area and in the lifestyle area. Finally, when it gets to comfort, an area that no one is really talking about, but, an activity is huge, and that is walking, we will now build walking shoes. I'm not talking about competitive walking, I'm talking about what people normally do, and build specific products for the needs of that activity and make sure that walking becomes a category that builds product at the high end, but also, of course, also on the commercial end. You see some examples on it on the screen behind me. That was performance and then lifestyle. In your area, saying growing then probably only 6%. We are actually happy with that. You see the split between Originals and Sportswear almost the same, 7 and 5. We clearly see that lifestyle footwear has a more difficult time, and I explained it with probably a lack of newness, too much inventory of certain brands and high discounting. Therefore, we see a boom in apparel, and we are extremely happy with that development. We still feel that we, in combination of what you know, Terrace, and the extension of court, and all the work we have done on running lifestyle have the best lifestyle offer out there. And we still have great sell-throughs, and we feel that, you know, we have the pipeline what we need. We also then have to manage inventory according to what we see in the market and try not to jump on the discount wagon. That's why the what should I say, growth rate probably is a little bit limited by that. If you then look into extension of franchises, I think we've been good at that or the team has been good. You see here that the Samba has gone into Mary Jane constructions, which are flying, and that's an area where we don't have enough. We talked about low profile. You see here ballerina constructions that are low profile are flying. We know the whole retro running side in Adistar Control, also the takedowns. You know that our most successful running shoe in volume now is the Adizero SL, which started out as a performance shoe, extremely comfortable with a very fast look, has become, you know, a double-digit volume pairs that we're now extending into, I would say, different closure system like zippers, into different materials, also waterproof. That is becoming a whole franchise of a group of shoe. To the right side is what we have done with soccer culture. We are putting soccer uppers on, I would say, different technology bottoms. This has not been a major commercial side yet, but we clearly start to see that as we go to the World Cup, the interest for this is getting more and more, and they will be included now in many campaigns, so the visibility will be bigger. Apparel, I'm extremely proud what the team has done. If you think about how we looked in apparel three years ago, it was basically cotton and polyester, and I would say boring. That's why we also said that the industry was lacking interest and there was, I would say, competitors from fast fashion, and there was a lot of price battles on commodities like the black hoodie with your logo on. The investment here has been in materials. It's been in, I would say silhouettes. It's been a combination of global concepts and local concepts and bringing them across the globe. Also here, clearly leading the different looks and the different trends digital, and then commercialize them also into brick-and-mortar as we go. You see some of those looks. It's also clear that she is leading in this area with, you know, her fashion eye, and that we have targeted her very, very, very clearly in our communication. Collaborations been made mostly for footwear, but now also in apparel, not licensed that you see it, but also, you know, with partners when it gets to looks. We have a great process with ASOS, where we launch ideas together and then launch them to fashion shows and then commercialize them. We have also in the U.K. with Molly-Mae Hague, fantastic success. Then we have many global/local corporations where we do either very exclusive looks, exclusive collections, or we combine in line with different partners. This model is bringing a lot of freshness in the different marketplaces. We talked about the lack of number of footwear trends in the market, therefore, the need to do takedowns. I know some people don't like it, but I don't see an alternative, and I'm proud of it. We continue doing that. We now are also merging the product teams in a way that the access from the top to the bottom is seamless, so we can much, much quicker agree upon what the segmentation and the distribution are from different sides. It's like that in footwear, but it's also the same in apparel. You see here examples what we're doing in Originals, then we take it down to what we call Essentials, but also in materials. When we started with denim, it was maybe 2,000 pieces, then it was extended in Originals. To get that look wider in the globe, it's also been taken down into the sportswear range. Of course, then you get the multiplier. We all know that trends goes much faster today than they used to do. Not only do we do this in product, but also in marketing. Here you see a beautiful Thomas Müller doing a culture wear thing for DFB Originals. At the same time, he's part of a campaign exclusive for Deichmann, because of his popularity and his playing, you know, this being Thomas Müller in both areas, and it works very, very fine. To summarize, we're very happy with the first quarter. We are very happy with the team's work, both globally in the machine, but also in the marketplaces. We think we delivered to you what we have promised. And what that all is in more details is now up to Harm. I'm handing the clicker over to you. Thank you, Bjørn, good afternoon, good morning from my side as well. As always, I wanna continue with some, you know, puts and takes of the financial update when it comes to the P&L and to the balance sheet. As always, I'll start on the top of the P&L with the net sales. Again, 40% currency neutral, or reported 7% in nominal terms. It's a great quarter. As I said, you know, earlier, there's headwind from the currencies, but that headwind should ease, you know, quarter by quarter. As you believe for the full year, it's probably more like 3%-4%, you know, for the full year. I also want to reiterate the quality of that, you know, 14%. Of course, there's a lot of World Cup business in there, but at the same time, if you're growing 22% in D2C, that also shows you what the quality of that, you know, top line is. When we go to the gross profit, I wanna give you some more details. This time it's a very, very easy bridge because we can get lost in a lot of details on the green bar. At the end of the day, the underlying business is improving compared to last year because, you know, pricing still slightly up, discounting is under control. In the business mix overall, you have, you know, category mix, you have market mix, you have channel mix, you have product mix, everything is in there, but everything is, you know, going up there as well. When it comes to product cost and freight, it's pretty much, you know, flat and normalized. It comes down to the two elements that we also mentioned in the, you know, full-year results when we gave our guidance. It's FX. Yes, U.S. dollar is positive, but there are other currencies. You know, luckily or from that point of view, not so good. These businesses are pretty big, meanwhile, whether it's in Turkey or in Argentina or in Japan, we are growing nicely. That has a negative impact. Of course, the U.S. tariffs did not exist in Q1 last year. Both these red or, you know, pink bars are amounting around EUR 50 million, to give you an idea. That nets up to 100 basis points, you know, low on the gross margin, resulting to 51.1% gross margin, which is again, shows the quality of our quarter and is definitely a very good result. Yes, very clearly, we're not saving ourselves, you know, to profitability with 11.5% on marketing and only a growth of 1%. We actually, you know, if we save something, we save for the next quarter because we want to make sure that we are showing up very, very well during the World Cup, that we win that event and use it as a platform for the brand overall, but definitely also for the North American business. Expect that marketing is definitely going up in the second quarter, and we're not saving ourselves to profitability. Where we will continue to be disciplined is on the operating overheads, only going up 3%, and that 3% is credit to being very disciplined in every cost item, and it's very much attributed to an analyzed effect of retail. Stores that we opened last year or some expansion in Q1. As we are growing volume as well, not just growing through prices, we need to move more volume and some supply chain costs that are variable are going up as well. Pretty much analyzed retail and supply chain cost is the only increase. The rest of the business is run very, very disciplined and pretty happy how we are moving forward there. Of course, we talked about the operating profit with EUR 705 million or 10.7%. Again, good progress with almost, you know, EUR 100 million up in absolute terms compared to last year. When we go below the line, yes, financial expenses in net are up. The main reason for that is that we have less, you know, interest income because our cash is reduced. That was planned. Of course, the share buyback has something to do with that one as well, but that is also something that will normalize over the next, you know, couple of quarters. There's some seasonality in there. Income taxes have normalized. I talked about it at the end of last year already. It is around 25%, exactly in Q1, 26%. That leads to a net income of EUR 484 million or 11% up to, you know, last year, the same quarter. Basics, earnings per share is pretty much the same. When it comes to the inventories, I want to, you know, click, do a double click on this one. Yes, it's up 13% or 70% currency neutral. As Bjørn indicated already, we made a conscious decision, and in hindsight, definitely the right decision, to invest our cash into our working capital and primarily in inventory to have availability. Without that availability and the early deliveries in inventory, we would not have been able to grow 14% in the first quarter, and we would not have been able to grow 22% our direct-to-consumer business. Definitely in hindsight, the right decision to do that. We will, you know, work through that number, you know, through the next couple of quarters. I was on record on the last quarter that this will stabilize, and it will definitely further go down in the second half as the World Cup is hopefully getting successfully behind us in the third quarter. Linked to our business also, our wholesale accounts, our receivables are up by 11% on currency with 16%, a little bit more than the business growth that you have seen. There's also some timing in there, accounts payable are definitely under control, linked to what we are sourcing with our factories. Overall, investment into the working capital, you see it up 21% or currency neutral, 26%. When we double-click on this one as well, I think the ratio is more important than the absolute number. You see that we have building up, we have invested in our working capital, primarily in the inventory. Yes, I'm not concerned about it. That was a strategic decision that we made. Rest assured, over time, we will get that below 23%. Of course, you know, looking into next year, I'm pretty sure we'll approach something around 21% again, which is linked to what I always said, being a healthy company. Most importantly, you know, some of the inventory, of course, is, you know, very, very healthy when it comes to the aging. When it comes to cash and cash equivalents, of course, a link to investment into the working capital and also the share buyback of EUR 500 million is reflected in our cash position in the balance sheet. Also there, no surprises. Of course, when I talk about the share buyback, which is my last chart, we have completed the EUR 500 million of the share buyback. We bought back 3.3 million units of share. Whether it was a perfect timing or not, but that's what we have, you know, contributed, and we are planning to contribute another EUR 500 million for the quarters to come. Of course, we are planning and proposing for the annual shareholders meeting around EUR 500 million in dividend. Overall, just in 2026, we'll return to shareholders EUR 1.5 billion in cash. With that, I hand over to Bjørn again for an update on where we're heading in the future. Thanks, Harm. I think what I'm showing you now will be a little bit repetitive. As I said, continuity is good. We clearly say we want to be a global brand with a local mindset. That is very important for us. I hope you agree that everything we should do should focus on the athlete or the consumer. This has been the strength of adidas in many eras. It should be it again. To be close to the consumer, it is important that the markets today are not all the same. We have different opportunities in different markets, both from a sourcing point of view, from a marketing point of view, also physically of what product is trending and what sports are happening. We strongly believe that we need to put even more responsible close to the consumer, meaning into the market. That means that they also have to be accountable for the commercial success in a much, much stronger way. Included in that is to have creation centers who can create products for the market where that makes sense. That is especially the case in some of the Asian market, especially in China, but also in Japan. Of course, it is very important to have a creation sense in the U.S. because we all know that the differences between the U.S. and Europe are bigger than people would like it to be. There will always be a global headquarter in Herzogenaurach. Rumors of people trying to tell that that's not the case, that is bullshit. This is the home of the brand, and this is where headquarter will sit. There will be, you know, the center for innovation, for global concept, for systems and the strategy, and the senior management. But I do hope that the time where you're sitting in an office in Herzogenaurach deciding everything, what should happen, that is not possible for a brand that is currently EUR 25 billion. This means that we don't only need the best people in headquarter, we also need extremely strong teams in the local markets. And I do think I can report to you that the teams we're currently having, both from a knowledge, from an experience, from an energy, is I would say the best that you can get. We feel we are on a very, very good way of executing this strategy. Needless to say, should the trends and the sports merge to be the same, then of course, we will not hinder that. To the people that are afraid of efficiencies, I think efficiencies in product, you measure on gross margin and not on a spreadsheet with Stuart Kantor. I would just like to put that on record. We have the vision to be the number one sports brand in all markets. Of course, knowing that we will not achieve that, all our country managers and market leaders should have that ambition, with one exception, that is the U.S., where, of course, the market leader is so far ahead of us. That we should first focus to get to EUR 10 billion, which I think you agree upon, and I know that our local management agrees upon. The locally relevant products that you see here showcases in apparel some of these differences. I'm happy to report that all these products that were designed and initially launched locally have then gone globally, which is the beauty of having creativity happening based on different cultures, because some of these cultures then actually move across regions. Our system puts all these concepts up on a platform, so all markets can buy whatever they want out of different regional concepts, which again, is the beauty of this. It's the same when it gets to activations. Of course, there are global activations. You would see World Cup being activated brand-wise globally, but even there, they're taken down, you know, to the different markets on a more local basis. I think you agree, different markets and different consumers are being motivated by different things. We are allocating resources from globally to the local so that we can again activate closer to the consumer. Again, the energy that we have achieved with this kind of thinking compared to what we had before is really high. That was a lot of positive things. We also have to admit that when you read the news, there is a lot of negative things. Of course, global conflicts. There has been many things happening over the last years and also this year that we would have hoped it would not happened. You also see that the industry is reacting to different things, and there's quite some changes in management and also in layoffs in many companies. On top of all that, we know that AI will come in and actually be a major change driver for how we're going to do business. The reason I'm saying this is that, you know, agility and the willingness to adopt your model based on what's happening in the world, I think is going to be crucial, not only for us, but I think on any global company that is working, you know, on consumer goods. I hope you agree, because I don't see any other alternative. I do think when you see what we're doing, we have been able to generate this attitude, and I think the resistance is getting less and less to this road. 2026 is a great year of sports, of course, especially because of World Cup. It's the first time that I have seen a real culture coming around World Cup when it gets to the product side, not only from the fans. The games will be great. You probably have counted the different teams. We will have 14 teams playing in the tournament. I think we've been very, very lucky with the products that we have designed. At least the reaction is great, both for home and away. I guess, around one third of the players in the World Cup will wear our shoes. As you know, we have the ball, so all the players will play with our ball. The brand will be exceptionally visible during the tournament on the pitch. As I said, not only on the pitch, you will see the jerseys, you start to see it already. You also see a lot of bring backs. That's what I mean by the culture. A lot of fans, but not fans, even not fans are buying into all soccer looks. There's a lot more football on the different streets than you ever seen before. As I said, we did a big investment in both design and development of product, both within soccer but also in originals. We did bring a lot of this newness into our warehouses. We have a great, what should I say, our product ready to go, and you will have newness in the market every week from now until the tournaments end. You know, we live under the spirit of you got this. We are adding we got this for the World Cup because we feel we are very well prepared and really looking forward to it. That means also with the first quarter being as it is and everything that we can see, we will keep our guidance currently for the year. We talked about the time after the four years, and we said that 2027 and 2028, we would like to be a successful company that will continue to improve our business model and our setup to this new world. That means trying to decrease complexity in the way we go to market and of course, optimize the processes, the systems in our organization, and also, I think be very, very conscious on where we can put AI into the business. That means that we needed to showcase that we're successful short-term because if not, you get upset with us, but then also make sure that the platform that we're building, with what we do short term also works, for the long term. That means that when you look into the future, we believe that we continue to add around EUR 2 billion in sales every year, and that we can take some of that growth and put it into the bottom line, which then will give you a 10%, 10% plus EBIT. I would like to make one comment about the 26 numbers that we haven't written about, and that is the tariffs, where you know that the Supreme Court have made a ruling that certain of the tariffs that were not bilateral should be paid back. I think we have told you before that that is around EUR 300 million that we can account for. There are some uncertainties in some of these numbers. We have not put that into neither our numbers, so we haven't booked any, or we have not put anything into our guidance. Just so you know that, and then we will see how things develop. The last thing is a beautiful picture of the German Bundesliga. We did a deal yesterday. That's why it's not in the package. We signed an agreement with the German League, Bundesliga, until 2034, where we'll be their partners on many, many things, including the ball. That's done not normally with a payment, but it's actually done with a credit that we've given to them. It's a new way of working together. As you know, the Bundesliga plays every week. It's maybe the highest quality league when it gets to the stadiums, the attendance, and maybe together with the Premier League, the best league also in the quality, at least now when you look at Champions League. That's why we are extremely proud that we were able to do that. Harm and the finance people have worked on this model for a while, and yesterday we were then able to actually sign it. Another addition to our commitment to sports and to also soccer. With that, I hand back to Sebastian. Yeah. Thanks very much, Bjørn. Thanks very much, Harm. Maura, we're now ready to take questions. The first question comes from the line of Aneesha Sherman from Bernstein / Société Générale. Please go ahead. Thank you so much for taking my question. I have two, please. Bjørn, I wanna start with your very last slide. You expect to grow high single digits in 2027 and 2028, that would be above market growth for five years in a row, and double digit and then high single digit for five years in a row. I understand there's a low base benefit as you're recapturing lost share, but equally, the competitive environment is getting more intense. Can you talk about what drives your confidence that you can continue to gain share for the next three years, making it five years in a row of share gain? One for Harm, please. Your Q1 margin came in at the high end of that high single-digit guidance, and as you go through the remainder of the year, some of those Q1 headwinds are either gonna roll off or disappear, tariffs, FX, and you've said underlying margins are improving. You know, how do you think about the remainder of the year? Should we expect a gradual improvement in margins versus where you are in Q1? Thank you so much. Yeah. I think that when we analyze the market, we go market by market, category by category, we identify this potential. Again, the potential is of course there in a world that stabilizes a little bit. We see growth potential both in the performance side, apparel and footwear, and the same in lifestyle in all the markets we talk about. Then there are certain markets that we think will grow much faster than maybe you think. Then there are markets where we see that we can take more share, maybe quicker by doing some changes. Again, you are never guaranteed to get a EUR 2 billion growth every year, this is a bottom-up approach from the markets. I think this is also a change that this is not us sitting with a strategy group doing a spreadsheet. It is the potential that the market leads see based on they getting the resources that they need. Again, you of course have never a guarantee that all these things will happen. There are volatility in many things. We think that the brand we have, the awareness we have, everything that we can measure on the upper and the mid-funnel when it gets to how people see our brand. Then the pipeline of product we have, of course, not knowing what competition has, I agree with you, that's why we come up with these numbers. The other thing where I disagree, I know there are some colleagues of you that have said that, you know, sneakers are over and everything will be formal, and that's why the industry will go down. I don't think that gentleman is traveling a lot because the markets with the biggest populations are those who will grow the fastest because they are not even close to the saturation that maybe some of the Western markets are when it gets to the using sneaker in all, what should I say, aspects. I do think that the whole comfort area, don't forget that there aren't that many footwear brands in the world that are delivering, I would say, comfort. With many Western population having an older consumer that wants very comfortable footwear, which means cushioning, which mean breathability, which means comfort in general, I do think that our industry actually have even a bigger potential targeting that. That's why we even now dare to talk about walking as a category to also target that group. You know, there's more people walking than are running, but nearly no one talks about it. There is many pieces into this, what should I say, calculation. Of course, we are aware of that, we need to do a good job. At the same time, we don't think that we are doing a great job so that we don't see improvements, but we see a big opportunity in both categories, markets and the way we actually work with what we have. We feel that this is the right way of indicating where we think we should land. Harm? Yeah, on the, on the, you know, gross margin, operating margin, real quick, Aneesha. First of all, we are not really, you know, managing these every quarter, you know, perfectly or whatsoever, but we want to make sure that we are doing the right things, and that's also the reason why we are refraining from a quarterly guidance. To answer your question, you know, for sure, with the World Cup, we always said that the top line definitely will come in, you know, with higher growth rates in the first half, you know, whereas the second half, given the World Cup. You know, secondly, we always said that the gross margin will improve at the second half, especially when it comes to the, you know, hedging that we have in the currencies. When it comes to the operating margin, yes, we had a very, very good start in Q1. You might know that Q1 and Q3 are always our, you know, bigger quarters. As I indicated earlier, we definitely want to make sure that we invest into the World Cup, so marketing will definitely go up in the second quarter. We all know that the fourth quarter is not the most profitable quarter. This is where we are. Clearly, you know, top line, more the first half, gross margin, you know, will improve in the second half, it depends quarter on quarter. We want to do the right thing, and the right thing is investing into the World Cup in the second quarter. That's pretty much where we are. Okay. Thank you. Very helpful. Next question comes from the line of Adam Cochrane from Deutsche Bank. Please go ahead. Good afternoon, guys. I think it's almost fair to say great quarter on this occasion. Two questions from me. First of all, can you give any idea on how big the impact from the jersey football, the World Cup related sales were in Q1? Are we still expecting 2Q to have a bigger impact on the top line than we saw in the first quarter? The second question is, you talked about maintaining tight inventory to your retail partners. Do you think that their sell-through has remained strong? Do you think there's been any limit on the sales that they could have generated by you sort of maintaining a tighter inventory position with your retail partners? Just to make sure, you're not keeping some of the best-selling products to sell via DTC rather than giving them to the wholesale partners? Thanks. Well, your second question, do I think certain retailers could do more full price sales if they had more of our inventory? I would definitely say yes. Now, you know, there's a lot of deals in the marketplace and I think many retailers have bought deals that they're then discounting because people have been worried about, you know, not having a price aggressive enough offer and price aggressiveness in many markets means discount. You know, there's always a, what should I say, wish, how you would like retailers to act. I think the proof is in our DTC numbers. When we have double digit like for like growth in our own stores, I doubt that multi-branded retail has the same number. That is obvious that if you had had the right adidas product in your stores and had more of it instead for discounted, then you could have done more sales. You know, this sounds maybe arrogant, and it's not meant to be. It's just that's the way it is. I guess any brand right now that feels they have a hit would say the same thing. To the issue of do you hold back some inventory and models DTC first, that would normally not be our strategy at all because we wanna be the friend of the retailer. It is true today that in the discounted environment, you might start to do that because you don't wanna put the new shoe that has a full p rice launch. Then put it into environment where everything is minus 20, and especially if big brands having their best franchises discounted, then it pulls everything down. There is some truth to it. I wouldn't say this is substantial, but of course, we would, what should I say, defend newness now in a different way than we would have done 18 months ago. The sales of World Cup product. Now we need to be careful because I know your spreadsheet has all that is World Cup on, in addition, on top. I would say that the World Cup product that has been sold in our bookings in Q1 is around EUR 250 million ballpark, ±. I assume it will be the same in Q2. Now you have to remember there's a lot of soccer culture product that is not World Cup product, but are still the lifestyle product or even performance product. The soccer impact or the football impact as a trend is much bigger than the World Cup product. Of course, the math is not that, okay, you sell EUR 250 million World Cup products in Q2, then next year you do zero. That's not how it works. The idea in this is that we are establishing now a trend and a way of working with apparel especially, but also a little bit shoes, that builds over time a business that goes far beyond just an event. I think you agree that basketball did this for a long time. The basketball lifestyle coming out America became, you know, a normal, I would say, almost commodity, in the lifestyle side of sports fans and young people. We start to see that in football, and although some of this is an additional revenue right now that, yes, more Mexicans are buying the Mexican jersey than ever, and you can do those parallels in many markets. The soccer inspiration is going much, much wider than that. You can just go back to Oasis last year when we did the merchandise with Oasis. It looked almost like it was a soccer program, but it wasn't, right? The impact of football that you see is not booked only as World Cup and it's not a one-time wonder. That's why we are not sitting being nervous saying that we cannot replace these sales next year, but it won't be. It will probably be less Mexican jerseys unless they won the World Cup. But there will be enough soccer-inspired products and lifestyle and performance product to carry the ball also in the future. That is the plan, and, you know, we weigh into these plans. That's great. Well done. The next question comes from the line of Edouard Aubin from Morgan Stanley. Please go ahead. Hi, guys. Two questions for me, Bjørn, on the footwear and the sequential deceleration you mentioned. Maybe to start with the market dynamics, which you already talked about. You know, I think you mentioned, you know, lack of innovation and from your peers and elevated inventory, which led to discounting. You don't have a crystal ball, you talk to a lot of people in the market, the retailers, and you kind of, I assume, track the inventory of your competitors. For how long? You know, if you look at the next, you know, 9-12 months, how do you see the situation in terms of the competitive landscape, particularly in footwear? The second question related to that. One thing, I guess, is the market dynamics. The other thing is the lifecycle of some of your franchises in footwear. Would it be fair to say that, you know, performance was obviously up in footwear in Q1, and then lifestyle kind of flattish to down? For how long? You know, again, you don't have a crystal ball, but would you expect, you know, the drag from lifestyle, you know, footwear to continue? Thank you. Well, what was the visibility into competitors' inventory and the next six to nine months? I wish I had that. I think that would be illegal, so I don't. I think this has to do with attitude of competitors and are you going for your top line or are you trying then to get more profitability? I think that goes for the whole industry. I do think as a defense, I think all of us, competitors also, and retailers, of course, with the instability in the world, with wars and conflicts and all that, and supply chain issues and tariffs, of course, this uncertainty has also not helped. I do think that people have guarded their top line by then making deals. I think the unfortunate thing by the deals is that if a supplier gives a discount to a retailer, and he does it to more than one, they will start to discount, you know. That's the competition and people are afraid of not selling. If one discount, we need to discount, and then it's a spiral. It's always in the interest of all of us to try to avoid that. I'm not saying that we have been or are perfect on it, but we've been very conscious about it, and you see that in our gross margin. I do hope, I also believe that the big brands will get out of this because it doesn't bring anything, to be honest, neither on the retail side, nor on the brand side over time. If there gets a little bit of stability, so we actually know what the tariffs will be, then I think U.S. will also recover pretty quickly. I think the issues in Europe is a little more complicated because the European economy is currently not growing, depending on the oil price, I think demand by the consumer is down. Therefore, of course, then you need to adjust your offer so that you have enough, I would say, more commercial price points in your range. I think the uncertainty actually in Europe is bigger than in the U.S. When it gets to our life cycle, you know, we have on-court, I think, as I said before, that of course Terrace, those three models that we talked about very often, you know, Samba, Gazelle, and Spezial has, of course, been the backbone. We have extended that into the Campus, into the Superstar, and we have talked very openly that we believe that the Stan Smith will get a lot of demand with the plans that we have for it. We are not afraid of that we will not continue to grow on the on-court side. You see the innovation stream we have on if it's silhouettes with the Mary Jane or ballerinas or materials. I think we have a setup right now with a great team, both in the markets, especially here in Herzogenaurach and in L.A., but also in the factories that can turn very quickly around depending on what is selling. We feel we are in good shape, at least compared to competitors. I think in the running lifestyle area, we are dependent on two things. We have not been leading there because other brands have done an earlier and better, what should I say, job than us. Of course, our success in court has of course hindered us a little bit in getting the same momentum in running lifestyle. We have tried now with everything that comes in retro, now we have three beautiful things. We have the Adizero SL that also goes on the street, which is a huge money bringer, not only for us, but also for the trade. We're building around that, so it's a whole group of shoes. We have the introduction of Hyperboost, which again is the most comfortable foam, which we will develop into many, what should I say, models. Because comfort is so important, we feel very, very, what should I say, sure that we're onto something, at least from the mid to the high price that will be successful. Then we do hope, to be very honest with you, that the success we're having in high-end running, and you don't see it only that we're winning marathons. The usage of adidas shoes in races, if it is the Boston Marathon or London Marathon, you know, has in the last three years almost tripled, I think. Of course, there is a hope that that consumer and that look is also then going more on the street. There's many elements right now that makes us feel optimistic. Of course, the 30% growth in running is also coming from that these things are happening. Again, we feel that we're doing, you know, or our people are doing a lot of good stuff in a market that right now I think is peaking on volatility, to be honest. As always in life, sometimes there is some good news and everybody can breathe a little bit. I don't know if you remember, but we had supply issues in Vietnam, I think just after COVID. There was a supply issue, everybody had too little newness, and then suddenly no one discounted, and we all made money. I, and I do think when I look at least at our purchasing, we have reacted to it. When I hear the factories, I think orders are down with most brands. It looks to me that there is a discipline on the way that would help a little bit. But again, I don't have a crystal ball, you know, because then I would probably sell and buy shares, right? Like you do. Great. Thanks. The next question comes from the line of Jürgen Kolb from Kepler Cheuvreux. Please go ahead. Yes, thank you very much indeed. Obviously, big congrats to the performance in running. The Sub2 was a major breakthrough and obviously widely covered, a very strong performance. Two question areas really. First one on the whole cost situation. Maybe you could talk about the individual cost lines, the whole cocktail of, being it, raw material prices, transport costs, tariffs, obviously. What do you see in terms of coming towards you for maybe the second half or even 2027? Do you see maybe the first issues on lack of availability of raw materials on the producer side? Secondly, recently, you obviously added soccer teams. You expanded in Formula One, you added additional U.S. universities, the new partnership with the Bundesliga now. Where do you see additional white spots, Bjørn, for adidas? You touched on it a little bit. Basketball, obviously, both in the U.S., but apparently also outside of the U.S. Maybe additional thoughts on where you think you need to bring adidas even more to the forefront in performance. Thank you very much, guys. Well, on the cost side is a little bit looking into that crystal ball again. There's no doubt that the current oil price, and the issues there are driving discussion about price on materials, components and also on transportation. We haven't seen any increase on product prices yet because you have to remember, we negotiate this way upfront, and the material sourcing of the factories are also happening on a longer base than the end product. Everybody's of course, hoping that, you know, the oil comes down to a different level. There is no certainty on this. The only certainty we have is there are certain upcharges on transportation, especially of course, on sea for us. Air, you can almost forget because, you know, you wouldn't fly things now, and you remember that most air transport was going through Middle East. It's not really that easy anymore to move air at all. We have, for the Middle East region, where we have 10 markets that are affected by the war, of course, problem also with deliveries. I mean, to deliver product in. Then, of course, we also have issues in the marketplaces with depending on how the activities are that stores are closed and of course, also that consumers are not actually walking in the streets and shopping. There is a negativity in that area that is double, a, from a transportation point of view and b, from a real business point of view. Again, we of course, all hope that the change in the world power or improvement in the world power will cause these conflicts to end. I'm not sure. I assume that when we talk to the next, you know, four, eight weeks, we will have more the different possible variances when it gets to cost prices. I think we will start then to price products in a buying price based on, you know, what happens if the oil price is EUR 200 and what happens if it's EUR 100, then start to build a fair relationship with our suppliers, because that is, of course, what we have to do. We were together with all our factories in Vietnam two weeks ago and of course, this was a topic. As always, I think the strategy from both them and us is then to find common solutions that are transparent, like we did with the tariffs. We're not at the stage yet where this is specific. In the product that does have hit our warehouse until now, there is no increases except for certain upcharges on transportation because of contracts where there is a possibility to raise oil charges. That's the only thing. White spots. I think in general, I would have liked to connect more to the male consumer in lifestyle footwear, especially in the U.S. I think, you know, we have connected with her, I think all over the world in a very good way, lifestyle-wise. I think we're connecting to her now both in footwear and apparel, and there's almost no blind spots, I think, from a geography. I think in the U.S., it's obvious that that's where we have most blind spots, and the blind spots are bigger on the male side than on the female side. I think that's back again, that we have not qualified over time to be in the American sports. There is a natural move for the kid and the family to go to our brand. It's much easier for them to go to more American brand, and I think you know who I'm talking about. Of course, that will take time. When it gets to sports, our clear challenge has been to improve our running. You know this. We talked about it three years ago, and we admitted that we had a long way to go. I think we have been successful in what is visible, but it's obvious that from a distribution and connecting to the running community and building our business into not only the top end, but also to the everyday runner and into the comfort runner, there's still plenty of room to grow. It's also a growing market. Of course it has focus for many, but I don't think we need to hide for competition. The comfort area also into maybe boring area like walking is an area that we dare to talk about because we see a huge demand and that will also continue. I think that's how we have to leave it. You know, there is so many areas. If it's in team wear for teams in all kinds of sports, if it's in specialty sports, if it's distribution in some markets in golf. I mean, the list of opportunities that we have is much longer than the growth that we are trying to achieve. There's a lot of white spots still, but currently it is to focus on what we currently focus on and then adjust that as we go. Thanks so much. Of course, Frankfurt, the license gear. Well, big sales generator. Yeah, I know. I know. The next question comes from Geoff Lowery from Rothschild & Co Redburn. Please go ahead. Yeah. Hi there. Just one question for Harm, really. I was really struck by the very tight control of overhead, particularly in the context of how strong your DTC growth was and presumably the incremental costs that come from servicing online growth. Can you help us understand how far you are along this journey of being able to leverage your overhead and how much there is more to go for in terms of draws between cost and sales growth in 2027 and 2028, please? Hey, Geoff. Good question. I mean, first and foremost, we always said that we will not be, you know, declining in absolute numbers on the cost side. We always talked about leverage, right? That is why I said there is an annualization of retail stores. Of course, we are moving more volume, there are supply chain costs. We also always said we have an infrastructure in place that was built for a EUR 30 billion business. Yes, we add the warehouse here and there, we also believe from an organizational point of view, we have what it needs. Now with an operating model that is more local, it is more like empowering the teams to make the right decisions and avoiding to aligning and being in circles, right? That's why I believe, we also did some, you know, changes in a very, you know, quiet way, you know, also in the headquarter in the last couple of years, and we see the benefits of that now, how we control the cost. You should continue to see in 2027 and 2028 that in absolute terms, we are growing, but we want to see more leverage. The main reason for that is that we have the infrastructure from an organizational point of view, also from a DC, from a digital infrastructure to leverage that to see high single-digit growth. That's what you should expect. It will not be linear every quarter the same, because it depends on the shape of the business. We are very confident that also the 2027, 2028 we'll be able to leverage our operating overhead line. Great. Thank you. The next question comes from the line of Warwick Okines from BNP Paribas. Please go ahead. Thanks very much. Good afternoon. I'm gonna ask a short-term question, please. Given that the Middle East conflict started midway through the quarter, it would be very helpful if you could comment on the quarter exit rate or what you've seen in April, please. The second one is that in those trade partners where your competitors are selling in aggressively using discounts, what are you actively able to do to maintain shelf space and market share? Thank you. Well, I do think that if many people are aggressively making deals, then of course you cannot protect shelf space, yeah. That is the trade-off that you're having. I do think, you know, as far as we can grow like we are currently doing with the gross margin, then there's an argument not to jump on that boat, right. That's the argument. Hopefully, I assume this will happen. I don't think people will continue to do this because I don't think it helps neither the retailers doing it, to be honest, nor the brands. We all been in situation here or in other brands where we had that choice either in a marketplace or maybe even globally. You know that it is a difficult decision. It's obvious that in certain areas we would have lost shelf space. The good thing is that then we have caught that sale ourselves in D2C by, you know, having more consumer than buying our brand, full price or with a less discount than neither digital or brick and mortar. So far, the brand heat and the offer has kind of balanced it, but there of course is no guarantee for that, to be honest. When it gets to the Middle East, it's of course difficult to do anything linear, but I think we could say we have lost around EUR 30 million in sales in the quarter, up and down. Of course, that's mainly in the last month. If you take that as a, as a indicator of how it could be, you could lose EUR 100 million in sales in next quarter if there's no change. You're losing then the full margin on that and the cost of doing business is expensive. There is some pressure, although not huge, huge, huge, but it could easily be, you know, EUR 50 million-EUR 60 million loss of profit in next quarter should we not get out of this. Don't take that number and put it into the spreadsheet because it's not, there's not any proof that this is a number, but that could happen, right? Because it's kind of obvious if you had sales there last year and no sales in the store this year, then that's a loss. It's also needless to tell that, you know, when the government are telling you to not run the stores or your management says it's not safe, then we will close it. It's also obvious that it's more expensive now to get products into the region. There are negativities, but in the big scheme of thing, you know, the emerging markets group are then focusing first on the safety of our people, which is important. Secondly then to get growth and profitability out of those regions that are not affected. There's always ways of counter negative things. This one was of course not planned. Of course, we are mainly concerned every morning that everybody is well, and we will continue to do that, which is more important. Yep. Yep. Thanks very much, Bjørn. Cheers. I probably add a little bit to that, Warwick. First of all, we need to summarize what, you know, Bjørn talked about, of course, the gross impact when you talk about the Middle East, but the Middle East is part of the overall emerging markets and of course there's other opportunities outside of the Middle East. Just for whether you put it in a spreadsheet or not, and don't do it, just as a percentage of the total business, we are talking in the low single-digit when it comes to the Middle East, right? As sad as it is, and as much as we hope that it comes to an end very quickly to normalize our business, it's a low single-digit of our total business. Again, the emerging market is not just the Middle East. There are more opportunities outside of the Middle East. Yep. Thanks, Harm. The next question comes from the line of Robert Krankowski from UBS. Please go ahead. Hi, two questions for me, please. First one will be on EBIT margin. You reiterated your target of around 10% by 2027, which implies significant gross margin expansion. When you think about this gross margin ambition and then bringing this target and applying similar framework that you did in Q1, underlying gross margin expansion, do you assume to see it? Excluding any FX hedge benefits that you are assuming in 2027. The second question would be just follow up on the current trends. We talked about the Middle East, but what do you see in other regions, Europe, North America, LATAM, and in your DTC, but also in the wholesale? Like, I appreciate that probably your momentum is so strong that some of the wholesalers might plan to put some reorders, I guess, getting closer to Q2. Do you see maybe some level of cautiousness from them given the volatility in the market? Thanks. I think when it gets to the wholesalers, it's very different from region to region and also different from the different categories. Of course, we hope for reorders on things that are selling well. But as I said to you, in a market that is uncertain because of the general economy and oil prices, it is of course, also important for us to be, I would say, conservative in the way we plan that. And as I said, as long as the DTC demand is so high, we are not pressuring, you know, any retail partners to take more than they wanna take. I think again, that any retail partner now in their buys are trying to shorten their open to buy, to clean their inventory and then do a new start at the point in time, depending on where they're sitting. It's also obvious that the issues with discounting and what should I say, not great sell-throughs for many retailers is mostly in Europe and in America. I think any other market that we look upon are much more optimistic for different reasons. I think we will leave it with that. The beauty of having wholesale business, brick and mortar retail, and e-com is of course that if you have something good, you can market it three ways or actually selling it. I do think as much as I would like to take more share with many retail partners, of course, it's just sometimes it doesn't make sense to push for it because starting to discount is almost like a drug. If you start with it, how do you get out of it? Again, we are not market leader in all categories. Of course we need to follow what is then happening in certain markets. I think that's the only answer I can give you. I don't know if you want to talk about the EBIT, Harm. On the EBIT, you know, of course it's not such a steep, you know, increase from, you know, 2026-20 27. Rest assured, we have fully on plan to hit a 10% EBIT in 2027, and we're not gonna count just on what we're hedging in the U.S. dollar whatsoever, 'cause we don't know what's happening with the oil price, as Bjørn said. The margin is not the main driver. We have a non-World Cup event next year. Of course, as I said earlier, we will spend, you know, significantly more in Q2 than we did in Q1. That's why we don't need to repeat next year. As I said to, you know, Geoff as well, we keep leveraging the operating overhead, you know, infrastructure that we have. What you should expect in 2027 over 2026, of course, a solid top line that we can leverage the marketing line without the World Cup and more growth. We're leveraging operating overheads again. Hopefully we have a less promotional environment also on the lifestyle, you know, footwear, as Bjørn talked about, as, you know, other competitors have ordered apparently less. Let's see how we're getting into 2027, but we are definitely not relying on, you know, the currencies because they come and go as we learned the last 15 months. We need to have a sustainable business regardless of currencies. Of course, as you know, the dollar will help going to next year. We are well hedged, and we will use it in the right way. Next question comes from the line of Monique Pollard from Citi. Please go ahead. Hi. Afternoon. Thank you for taking my questions. Just a couple from me, if I can. The first one was just if you could give us an update, potentially, Bjørn, on how you're doing in the North American running specialty stores. I know this was a key area of focus and just given how strong that running business has been doing and the halo effect, I'm sure you'll get from the sub-two-hour London Marathon times. Yeah, how that's progressing. The second question was just on product pricing, probably more one for second half this year into 2027 for you, Harm. Just given that 99% of your polyester is actually recycled, what I was trying to understand is, does the pricing for the recycled polyester move one-for-one with the virgin and move with the oil prices or not so much? Thank you. I started answering you without a microphone, so I said something brilliant. I hope I repeat it. The question about running specialty news is a good one because we were basically gone. I think three years ago, we were measuring in market share below 1%. Of course, to build that business back again is not only dependent on the productBut is to get back in the running community, having people on the road, all that. We have a huge job to do still, but all the fundamentals are now in place. We have top shoes, you're absolutely right. Of course, the demand for having us in the store with our best product, is now fueled by the success. That started already, you know, I would say two years ago with the success of the Adizero models, but now it's being fueled even more. I think what we were missing was an offer in the comfort running that was competitive with some of our other competitors. Now we have it. I can assure you that the interest from running specialty is at a complete different level. If you go into many areas of the U.S. and you see stores, the visibility is not close to what it should be. A huge potential, and, you know, except that we have not done a great job for a long period of time, but also accept that it takes time to build back, you know, the trust and of course, the relationship. I have the full, or what should I say, trust also that the local teams are doing that. The second question on pricing, I mean, yes, we try to use 100% recycled polyester, and we even in the future are trying to use polyester coming from polyester, meaning textile for textile, which is the new way of recycling, not from bottles and other plastic product. I think it's fair to say that when oil prices, and I would say new polyester, is going up in price, the market coincidentally for recycling goes up the same amount. You know how the mechanics work. So we don't think there will be any price, what should I say, advantage, on recycled compared to virgin. It could even be the opposite, to be honest with you, because that's how sellers work. I think that's the answer to it. I think we all hope, and I think we all know that the world needs that oil prices comes down, right? I think that is now fueling even more conflicts and frustration around the world. Let's hope that the smartest people on the planet gets together and find solution to the conflicts, because then, we will not have this issue. I think also the good thing is that because people believe that there are solutions, the price increases that you would maybe have seen five, six years ago immediately also on components and materials are now currently more on a this could happen if A, B, C, D, and there is more hypothetical, different scenarios. Again, we are running very, very close to timelines where prices will actually start to get into the product. I think that's all I can say. Thank you. Maura, we have time for two more questions. Okay, thanks. The next question is from Andreas Riemann from ODDO BHF. Please go ahead. Yeah. Hello. Good afternoon. Andreas here. Two questions. One for Harm on the free cash flow. Actually, you didn't mention it in the presentation, looks like free cash flow was up. Maybe you can shed more light on the free cash flow in Q1 and what would be your free cash flow guidance roughly for full year 2026, assuming EBIT of EUR 2.3 billion and assuming inventory improvement. The second one on your top line guidance actually for full year 2026. We saw 14% growth in Q1. Was it actually in line with your own plan and you expect mid-single growth in H2, or was Q1 above and you now wanna keep this buffer for the remainder of the year? These would be my two questions. You know, there is no buffers in our industry. I think the 14%, to be very honest with you, is about what we planned initially. I also told you that we did take product in to the markets early. There was of course a possibility to deliver if there was demand. We haven't pulled anything forward to make it look better than it is. The growth that has been in addition has not been on the wholesale business, it's been on D2C, right? If you have product in the store and it's being bought, then planning retail is difficult. I can assure you that we didn't plan the like for like as high as it is. That is of course, again, an assurance that we're doing something right. That is about what we expected. I would say the wholesale business, I think we told you a while ago that in the middle of last summer when there was a lot of uncertainty, the order book for the beginning of this year was low. That order book actually built into a decent level, and I think the 8% you saw in wholesale was pretty much where we expected to land. The upside has been on D2C, both on brick and mortar and especially on e-com. I think that would be the best answer. Then Harm, cash flow is your area. Andreas, good question. Indeed, we have been slightly down in the first quarter when it comes to the free cash flow, and it's improving, you know, quarter by quarter. It's a story of two halves. Definitely much, much better on the second half as we had to and was the right thing to invest into our working capital. That will, you know, flip for the second half. For the full year, you should assume that we convert our net income that we're generating EUR 0.3 billion profit guidance by a factor of one. I would say around, you know, EUR 1.5 billion is probably a good number, whether it's EUR 100 million more, EUR 100 million less. We don't know. Assume that we are converting roughly the net incomes that we're generating for the full year. Okay. Thank you. Today's last question is from Nick Anderson from Berenberg. Please go ahead. Hi. Just the one question from me then, please. It's just a question on store closures. Assuming my data is correct, it looks like there was net store closures for the first time in about three years. I just wonder what was driving that, what the outlook is, and how that squares with the DTC opportunity you've been talking about on the call. Thank you. I think we had a bad sound on the store closings over the last 12 months is positive, meaning that we opened about 65 to 70 more stores than we closed. Sorry. My question was on. Sorry. Say again. My question was on the sequential closure. Q on Q, it was the first net closure in stores in three years. I just wonder if we should read much into that. No. Nothing. To be very honest with you, right now, we haven't opened as many stores because what we have done is that we have renovated a lot of stores. The opening plans, again, we're trying to open bigger stores than we close, the addition is actually bigger than the number. I think in the last 12 months, we opened around, last 12 months, 65, that is negative just in the first quarter. That's just coincidence. There's nothing to read into it. No, Bjørn is absolutely right. There's one anomaly from quarter to quarter, Q1, you know, 2026 to Q1 2025, because we started to have some temporary factory outlet clearance stores in the U.S. that we needed because of too much inventory, but we started to close them already last year. That's probably what you have seen in Q1, don't read anything into it. We will keep expanding our store fleet, both on concept stores and also on factory outlets. Thank you. Thanks, Nick. Thanks very much, Bjørn. Thanks very much, Harm. Ladies and gentlemen, thanks very much for joining our Q1 call today. This concludes the call. As always, if you have any questions today, tomorrow or over the next couple of weeks, please feel free to reach out to Adrian, Philip, Chiara, myself, or anyone else from the IR team. We will also be on the road, so hopefully going to see you there. Again, before we go, I wanna remind you, enjoy watching the documentary on the Sub2 journey. It's definitely worth it. With that, thanks very much again. Have a lovely day. Talk to you soon. Bye-bye.