Adidas warns tariffs will lead to higher costs on its U.S. products

Adidas Warns of Price Hikes on U.S. Products Due to Tariffs

Sportswear giant Adidas announced on Tuesday that President Donald Trump’s tariffs would lead to increased costs for all of its U.S. products. The company expressed uncertainty about the exact extent of the price hikes, citing the ongoing global trade dispute as a hindrance to raising its full-year outlook despite a significant rise in first-quarter profits.

“Higher tariffs will eventually cause higher costs for all our products for the US market,” Adidas stated. The company acknowledged its exposure to White House tariffs on Beijing, which currently stand at an effective rate of 145%. While it has minimized exports of China-made products to the U.S., the primary impact is from the general increase in U.S. tariffs on all countries, currently set at around 10% during trade negotiations.

Adidas highlighted the challenges of navigating the uncertain tariff landscape, stating, “Given the uncertainty around the negotiations between the US and the different exporting countries, we do not know what the final tariffs will be.” The company emphasized that cost increases due to higher tariffs would inevitably lead to price hikes, affecting consumer demand for its products.

Despite the tariff-related concerns, Adidas reported a significant improvement in earnings for the first quarter. Net income from continuing operations surged by 155% to 436 million euros ($496.5 million), surpassing expectations. Net sales also saw a robust increase of 12.7% to 6.15 billion euros, with an operating margin rise to 9.9%.

In a positive development, Adidas resolved its collaboration with musician Ye, severing ties over controversial comments in 2022. The company announced the completion of the Yeezy stock sell-off, marking the end of a longstanding issue.

Analysts praised Adidas for its strong performance across various metrics, noting double-digit sales growth in all regions and channels. Despite the economic uncertainty posed by U.S. tariffs, the company remains optimistic about continued growth in footwear, lifestyle clothing, and performance categories.

As Adidas grapples with the impact of tariffs on its operations and pricing, the company is focused on maintaining its momentum and adapting to evolving market conditions. The retail industry, including luxury brands like Hermès and e-retailers like Temu, faces similar challenges in navigating the tariff landscape and managing consumer demand.

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