Adidas warns of higher prices as tariffs hit home
By Abigail Townsend
Date: Tuesday 29 Apr 2025
(Sharecast News) - Adidas posted a surge in sales and profits on Tuesday, but warned that Donald Trump's swingeing tariff regime would likely result in higher prices going forward.
The German sportswear and fashion brand saw revenues strengthen 13% in the first three months of the year, to €6.15bn.
Driving the growth was footwear, which includes popular brands such as Samba and Gazelle. Sales in the division rose 17% on a currency-neutral basis.
Operating profits, meanwhile, surged 82% to €610m, helped by a 3.8 percentage point increase in the operating margin, to 9.9%.
Chief executive Bjorn Gulden said it had been a "great" quarter.
But he continued: "In a normal world, with this strong quarter, the strong order book and in general a very positive attitude towards Adidas, we would have increased our outlook for the full-year, both for revenues and operating profit.
"The uncertainty regarding the US tariffs has currently put a stop to this."
Gulden said the company had already reduced Chinese export to the US "to a minimum", but despite this remained exposed to "very high" tariffs.
"Since we currently cannot produce almost any of our products in the US, these higher tariffs will eventually cause higher costs for all our products for the US market," he warned.
"Cost increases due to higher tariffs will eventually cause price increases, not only in our sector, but it is currently impossible to quantify these or to conclude what impact this could have on consumer demand for our products."
Yanmei Tang, analyst at Third Bridge, said: "Adidas has taken significant steps to mitigate tariff-related risks, but it isn't immune.
"The company still faces meaningful exposure, particularly because a large share of its footwear is produced in Vietnam, one f the regions most vulnerable to tariff pressures.
"While Adidas has diversified its supply chain across countries like India, Turkey and South Africa, and built flexibility into its sourcing strategy post-Covid, these efforts can only soften the blow."
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