London — Sportswear brand Adidas warned on Wednesday that it may have to hike prices in the US after reporting US tariffs would add about €200m ($231m) to costs in the second half.
Shares in Adidas fell more than 7%, bringing the stock’s losses since the start of this year to 23%.
Highlighting the effect of US President Donald Trump’s volatile trade policies, Adidas said uncertainty was holding it back from increasing its annual guidance, and it has not yet decided on possible price increases to mitigate the effect.
“We still do not know what the final tariffs in the US will be,” CEO Bjorn Gulden said in a statement. “We also do not know what the indirect effect on consumer demand will be should all these tariffs cause major inflation.”
Adidas will review its pricing and decide which products it could hike prices on in the US, once tariffs are finalised, Gulden told journalists on a conference call, declining to say how much prices might increase.
Shortfall
“We will try to keep the prices on known models (stable) as long as we can, and then do new pricing on product that hasn’t existed before,” he said.
Adidas sales grew 2.2% in euro terms to €5.95bn in the quarter, lower than analysts’ average estimate of €6.2bn, according to data compiled by LSEG.
The shortfall will likely fuel fears that, after a run of very strong sales growth fuelled by its trendy three-striped multicoloured Samba and Gazelle shoes, Adidas is losing momentum.
“For investors to view this as a temporary setback, the company will need to deliver a reassuring message regarding the outlook for H2 and the early 2026 order book,” UBS analyst Robert Krankowski said in a note to clients.
Front-loading
The US earlier this month announced a 20% levy on many Vietnamese exports and a 19% tariff on goods from Indonesia — Adidas’ two biggest sourcing countries which produce 30% and 23% respectively of Adidas products sold in the US.
Footwear imports into the US already faced tariffs before Trump, and the new duties mean tariffs on footwear from Vietnam have gone up to 46%, from 26%, and from Indonesia to 43% from 24%, Gulden said.
Like many other sportswear companies, including Puma, Adidas has been front-loading product shipments into the US ahead of tariffs, driving its inventories up 16% to €5.26bn at the end of June.
Despite the effect of tariffs, Gulden said the US, which accounts for about a fifth of Adidas sales, is still a key market.
“We want to grow and we are also willing to over-invest in the US to double the business,” he said on the call.
Higher tariffs already had a “double-digit” million euro effect on Adidas’ second quarter, and Adidas is also contending with a weaker dollar and weaker Chinese yuan taking €300m off quarterly sales.
Quarterly operating profit, however, reached €546m ahead of analysts’ expectations for €520m.
Adidas said “lifestyle” revenues — from sneakers and casual clothing — grew 13%, helped by cow print, leopard print and metallic versions of its SL72 and Samba sneakers.
A merchandise collaboration with rock group Oasis for its reunion tour has also boosted sales, Gulden said.
Reuters
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