Adidas Faces Higher Tariffs and Rising Costs
Adidas is facing increased costs due to higher U.S. tariffs, adding 200 million euros in expenses for the second half. The tariffs impact Vietnamese and Indonesian exports, major sourcing countries for Adidas. Despite this, Adidas' net sales rose 2.2% in the quarter, and its gross margin increased.
Adidas announced on Wednesday that higher U.S. tariffs are expected to increase its expenses by approximately 200 million euros ($231 million) in the latter half of the year, after already impacting its second quarter results by a significant sum.
The United States confirmed new trade deals imposing a 20% levy on many Vietnamese exports and a 19% tariff on Indonesian goods. These tariffs affect major Adidas sourcing countries, with Vietnam and Indonesia contributing 27% and 19% respectively of the company's products as of 2024.
Adidas' CEO Bjorn Gulden expressed concerns about potential indirect impacts on consumer demand due to inflation risks associated with the tariffs. Although the company's net sales rose 2.2% to 5.95 billion euros in the quarter, Adidas' inventories climbed 16% in preparation for these tariffs. The gross margin saw a slight increase to 51.7%, with lower product and freight costs mitigating currency and tariff effects.
(With inputs from agencies.)
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