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On April 4, 2025, customers were seen shopping in an Adidas store located in Miami, Florida.
In a recent statement, Adidas announced that the tariffs imposed by U.S. President Donald Trump would lead to increased prices for all products sold in the U.S. market.
The company indicated that it was still determining the extent of these price hikes. Additionally, the ongoing global trade dispute has hindered Adidas from enhancing its full-year financial outlook, despite a significant rise in first-quarter profits.
According to Adidas, “Higher tariffs will eventually cause higher costs for all our products for the US market.” The brand expressed that it was “somewhat exposed” to the current tariffs on imports from China, which stand at an effective rate of 145%. However, it has minimized exports of products manufactured in China to the U.S. The more substantial effect, according to Adidas, stems from recently heightened U.S. tariffs on imports from other countries, currently at a rate of around 10%, pending ongoing trade negotiations.
Adidas continued, stating, “Given the uncertainty surrounding negotiations between the U.S. and various exporting nations, the final tariff rates remain unknown.” This uncertainty restricts the company from making any definitive pricing decisions. “Cost increases from higher tariffs will eventually lead to price increases across the board. However, quantifying these changes and understanding their impact on consumer demand is currently unfeasible,” the statement elaborated.
The company also highlighted its inability to manufacture most of its products within the U.S. Currently, Adidas relies on production facilities located in countries such as Vietnam and Cambodia, where U.S. tariffs could exceed 40% without a trade agreement.
This issue of potential price increases and their effect on consumer demand is not unique to Adidas; it is a widespread challenge for nearly all retail businesses in the U.S., spanning from budget online retailers like Temu to high-end brands such as Hermès.
Positive Earnings Report
Without the complications posed by U.S. tariffs, Adidas projected that it would have raised its revenue and operating profit outlook due to a strong order backlog and favorable brand sentiment. Instead, the company reaffirmed its existing outlook while admitting that “the range of possible outcomes has increased.”
In results largely disclosed earlier, Adidas reported a 155% surge in net income from continuing operations for the first quarter, totaling 436 million euros ($496.5 million), surpassing the forecast of 383 million euros. Net sales rose by 12.7%, reaching 6.15 billion euros, with the operating margin increasing by 3.8 percentage points to 9.9%.
Adidas has finally moved past the complications stemming from its collaboration with the controversial musician Ye, which ended in 2022 due to anti-Semitic remarks. Recently, the company announced that it had sold the last of its Yeezy inventory.
Analysts from Deutsche Bank remarked in a Tuesday note that Adidas achieved “a good print, showing progress across all areas,” despite the ongoing uncertainties. Mamta Valechha, a consumer discretionary analyst at Quilter Cheviot, noted, “So far this year, Adidas has experienced double-digit sales growth across all regions and channels, with wholesale outpacing direct-to-consumer sales.” She added, “Footwear remains a strong segment, with consumers also gravitating toward lifestyle apparel, while the performance category continues to thrive. While Adidas hopes these trends persist amid the economic uncertainties linked to U.S. tariffs, the complete impact remains to be seen.”
Source
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