Adidas cautions over higher prices and halts outlook upgrade due to tariff woes

Western Telegraph

29-04-2025

The German sportswear giant said prices will rise in the face of cost increases from US President Donald Trump's move to raise trade tariffs on goods imported into America, with US customers expected to see higher prices for all its products.
Chief executive Bjorn Gulden said: '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.'
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 Bjorn Gulden, Adidas chief executive
He added: '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 the consumer demand for our products.'
The group said it would have hiked its full-year earnings outlook after a robust first quarter, but that it held off due to worries over the ultimate tariffs put in place and the impact on the group's sales.
Mr Gulden said: '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.'
It saw pre-tax earnings more than double to 585 million euros (£497.3 million) in the first quarter, up from 245 million euros (£208.3 million) a year ago, as revenues rose by 13% on a constant currency basis to 6.15 billion euros (£5.23 billion).
The group is expected to be hit hard by the US tariff hikes as it makes many of its products in Asian countries, such as China and Vietnam, and is understood to be unable to shift production to the US due to a lack of specialised equipment and workers in America.
As always, we will try to manoeuvre through this uncertainty in the most pragmatic, agile and flexible way Adidas
It said that while it has cut back its exports to the US to a minimum, the wider increase in general US tariffs is 'even worse' for the group, as it affects its key sourcing markets.
Adidas said: 'As always, we will try to manoeuvre through this uncertainty in the most pragmatic, agile and flexible way.
'We have all parts of the organisation involved and will do everything we can to assure that our US retail partners and our US consumers will get the Adidas product they want and to the best possible price.'