Increase in Product Costs Forecasted in USA due to Custom Duties (Tariffs) by Adidas
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The Shocking Truth About Adidas and Tariffs
In a bold move, Adidas CEO Bjorn Gulden spilled the beans that the company's inability to manufacture most of its products within the US borders is leading to a steep rise in the prices of their products for the American market.
Gulden pointed out that the company is hit hard by high tariffs despite drastically reducing exports from China to the US to a bare minimum. He also emphasized the negative impact of these tariffs on various other nations.
Adidas' Q1 2025 financials were an impressive sight, with a whopping 13% growth in revenue to reach a staggering 6.15 million euros. The operating profit skyrocketed to 610 million euros, and the net profit more than doubled to 436 million euros. The driving force behind this growth was Adidas footwear sales, which increased by a mammoth 17% compared to the previous year. Clothing sales also saw an 8% increase, and accessories witnessed a 10% boost.
Despite the uncertainty surrounding the potential US tariffs, Adidas remains unwavering in its 2025 forecast. The company expects its operating profit to rocket to a mind-blowing 1.7-1.8 billion euros this year. Adidas also predicts a further surge in market share and sales growth.
On April 9, "reciprocal" tariffs by the US on certain countries came into effect. Just a few hours later, US President Donald Trump suspended the imposition of tariffs on more than 75 countries that hadn't retaliated against the US for 90 days and set a basic rate of 10%. The decision didn't affect China. With previous tariffs already in place, the rate for the country now stands at a whopping 145%, as clarified by the White House. Beijing also escalated tariffs on the US to 125% on April 12. On April 22, Donald Trump declared that Washington is considering the possibility of striking a trade deal with China.
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Enrichment Data:Adidas' Q1 2025 performance showed a robust sales growth of 13% globally, fueled by a sensational 17% increase in lifestyle footwear and double-digit growth across all markets[1]. However, tariff anxieties due to potential revived Trump-era trade policies or new proposals created operational jitters, despite no direct confirmation of active tariff implementations in the report. Key impacts include:
1. Growth and Market DynamicsAdidas recorded a soaring 18% e-commerce growth (excluding Yeezy) and a strong 13% growth in the North American market, attributing success to its lifestyle catalog expansion via models like the Gazelle, Samba, and Spezial[1]. The absence of Yeezy-related disruptions in 2025 contrasts with earlier post-Yeezy turbulence, suggesting tariff concerns now overshadow previous challenges.
2. Tariff-Related CautionCEO Bjørn Gulden explicitly linked the postponement of full-year outlook upgrades to tariff uncertainty, stating it halted plans to raise revenue and profit forecasts despite strong orders[1]. This suggests tariffs (or their threat) are now the primary external risk factor, potentially affecting pricing, supply chains, or consumer demand in Adidas’ largest markets.
3. Strategic ResponsesThe focus on collaborations and new silhouettes (e.g., Megaride, Goukana) alongside classic models reflects efforts to diversify beyond geopolitical risks, though reliance on globalized production leaves tariff exposure unresolved[1]. The report implies tariffs could disproportionately impact Adidas compared to competitors with localized manufacturing. While specific tariff mechanics remain unspecified in the results, the operational hesitation underscores how trade policy volatility influences corporate strategy even without immediate financial penalties[1].
- In the Q1 2025 financials, adidas saw a profit surge with an operating profit of 610 million euros, thanks in part to a 17% increase in adidas footwear sales.
- Despite the 13% global sales growth in Q1 2025, CEO Bjorn Gulden expressed concerns about potential tariffs and their impact on adidas' business.
- The uncertainty surrounding tariffs has led adidas to be cautious about upgrading its full-year outlook, with Gulden linking the postponement directly to tariff concerns.
- In an effort to diversify beyond geopolitical risks and minimize tariff exposure, adidas has been focusing on collaborations and new silhouettes, but reliance on globalized production remains a concern.
