HERZOGENAURACH: Sportswear giant Adidas said Tuesday that U.S. tariffs imposed by the Biden administration will lead to higher prices for all its products in the American market, though the company has yet to determine the exact increase.
Despite a sharp rise in first-quarter profits, Adidas said ongoing global trade disputes prevented it from raising its full-year financial outlook.
“Higher tariffs will eventually cause higher costs for all our products for the U.S. market,” the company said in a statement.
Adidas noted it is partially affected by U.S. tariffs on Chinese goods, which currently stand at an effective rate of 25%, but said it has already minimized exports of China-made products to the U.S. The broader impact comes from increased U.S. tariffs on imports from other countries, many of which remain at 10% as trade negotiations continue.
“Given the uncertainty around the negotiations between the U.S. and different exporting countries, we do not know what the final tariffs will be,” Adidas said. “Therefore, we cannot make any final decisions on what to do.”
The company warned that cost increases from tariffs would lead to higher prices across the industry but said it was too early to gauge the effect on consumer demand.
Adidas currently manufactures little to no products in the U.S., relying instead on factories in countries like Vietnam and Cambodia—both subject to U.S. tariffs exceeding 40% in the absence of trade agreements.
The dilemma mirrors challenges faced by other retailers selling in the U.S., from budget e-commerce platforms like Temu to luxury brands such as Hermès.
Earnings Surge, but Outlook Cautious
Adidas reported a 155% jump in first-quarter net income from continuing operations, reaching 436 million euros ($496.5 million), surpassing analyst expectations. Net sales rose 12.7% to 6.15 billion euros, while its operating margin improved to 9.9%.
The company said strong demand and a positive brand outlook would typically justify raising its full-year forecast, but trade uncertainties led it to maintain its existing guidance while acknowledging a “wider range of possible outcomes.”
Adidas has also moved past the fallout from its severed partnership with Ye, the rapper formerly known as Kanye West, following antisemitic remarks in 2022. Last month, the company announced it had sold off its remaining Yeezy inventory.