Adidas Faces Tariff Challenges Amid U.S. Price Hike Considerations
Adidas reported potential cost increases of €200 million due to U.S. tariffs, prompting possible price hikes in the U.S. market. CEO Bjorn Gulden expressed concerns about consumer demand. Despite a sales increase of 2.2%, the brand's performance fell short of estimates, impacting investor confidence.
On Wednesday, Adidas warned of potential U.S. price hikes, attributing the decision to anticipated €200 million cost additions due to tariffs. This development led to an 11% plunge in Adidas shares, marking the worst decline since the U.S. President's higher tariff announcement in April.
The German sportswear giant is holding back from revising its annual guidance amid ongoing trade uncertainty. CEO Bjorn Gulden voiced concerns regarding consumer reactions to inevitable price increases across the sector, with final tariff levels yet to be determined.
Despite a 2.2% sales surge to €5.95 billion in the second quarter, forecasts fell short of analyst predictions. The prospect of footwear tariffs, affecting major adidas manufacturing hubs in Vietnam and Indonesia, adds to existing economic pressures. The company remains committed to expanding its U.S. footprint, viewing the market as crucial for growth.
(With inputs from agencies.)
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