High US Tariffs Strain Adidas - Sports Equipment Maker Sticks to Projections - Manufacturers of athletic apparel and footwear: Adidas
In the midst of escalating US tariffs under President Donald Trump, sports apparel giant Adidas has faced a significant challenge, with the company's import costs to the USA increasing by approximately €200 million ($230 million) in the latter half of 2025. The tariffs, which targeted Adidas's largest sourcing countries for the US market—Vietnam and Indonesia—saw tariff rates rise sharply, from 26% to 46% for Vietnam, and 24% to 43% for Indonesia.
To mitigate the impact and maintain supply chain continuity, Adidas has had to frontload shipments and increase its US inventory by 16%. This operational adjustment has put pressure on the company's profit margins, leading to a possible price increase for US consumers to offset higher import costs.
CEO Bjørn Gulden expressed uncertainty about how these tariffs might indirectly affect consumer demand due to inflationary pressures, but reaffirmed a positive profit outlook for 2025, albeit with cautious volatility. Adidas expects double-digit revenue growth in 2025, with its operating profit forecasted to fall between €1.7 and €1.8 billion. However, this confidence is contingent upon the tariffs having less severe impacts than currently anticipated.
Despite the challenges, Adidas is strategically repositioning itself by diversifying its supply chain to reduce dependency on high-tariff countries, aiming to secure long-term US market growth. This approach suggests resilience and adaptability in a fractured global trade context, potentially enabling the company to better compete against rivals like Nike.
The second quarter of 2025 saw Adidas' net income nearly double compared to the second quarter of 2024, amounting to €369 million. The operating profit surged by more than half compared to the same quarter the previous year, reaching €546 million. Adidas' revenue increased by 2.2% in the second quarter of 2025, amounting to €5.95 billion.
Despite the surge in profits and revenue, Adidas maintains its 2025 outlook, despite uncertainty about potential direct and indirect impacts of higher US tariffs. The tariffs are set to affect a wide range of US imports, with tariffs of 15% on almost all US imports set to apply from August 1.
In summary, the Trump-era tariffs have imposed a significant cost and operational challenge on Adidas’s US business but have also driven strategic adaptations aimed at sustaining its competitive position and long-term growth in the US market.
| Aspect | Impact on Adidas | |----------------------------|----------------------------------------------| | Tariff Rate Increase | From ~26% to 46% (Vietnam); 24% to 43% (Indonesia) | | Additional Cost | €200 million ($230 million) increase in H2 2025 costs | | Operational Adjustments | Frontloading shipments, raising US inventory by 16% | | Pricing Strategy | Plans to raise prices for US consumers | | Consumer Demand Concern | Possible dampening due to inflation | | Long-term Strategy | Supply chain diversification and market repositioning | | Profit Outlook | Positive overall but cautious due to tariff uncertainties |
Finance officials at Adidas are closely monitoring US Customs records to forecast the impact of the proposed 15% tariffs on almost all US imports, due to take effect from August 1. This additional tax could further strain the company's profit margins, potentially compelling Adidas to reevaluate its pricing strategy in the US market.
In the face of these tariff increases, sports enthusiasts in the USA may find themselves juggling their passion for top-quality sportswear with the rising costs, as business rivalry between Adidas, Nike, and other sportswear manufacturers intensifies in the challenging global trade landscape.
