Adidas Faces Financial Squeeze Amid Rising U.S. Tariffs

Adidas disclosed on Wednesday that increased U.S. tariffs are projected to add approximately 200 million euros ($231 million) to its costs in the second half of the year, following a double-digit million euro impact on its second-quarter results. This underscores the influence of U.S. President Donald Trump's unpredictable trade policies on the company's earnings.

CEO Bjorn Gulden expressed uncertainty regarding the final tariffs in the U.S., also highlighting potential indirect effects like inflation on consumer demand. Consequently, Adidas refrains from boosting its annual guidance, despite surpassing Q2 profit expectations. The company's shares fell by 2.6% during premarket trading, continuing a downward trend.

The U.S. recently imposed a 20% levy on numerous Vietnamese exports and a 19% tariff on goods from Indonesia, key sourcing nations for Adidas, accounting for 27% and 19% of its products, respectively. In response, Adidas, akin to other sportswear brands, accelerated product purchases into the U.S., increasing inventories by 16% to 5.26 billion euros at June's end. Adjusted net sales grew by 2.2% to 5.95 billion euros, trailing the analyst forecast of 6.2 billion euros, yet operating profit exceeded expectations, supported by a rise in gross margin due to less discounting and lower costs.

(With inputs from agencies.)