Adidas says tariffs will add $297 million to second-half costs
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Adidas reported strong second-quarter profits as consumers keep snapping up retro sneaker models despite growing economic uncertainty.
PHOTO: REUTERS
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GDANSK – Adidas on July 30 said higher US tariffs would add around €200 million euros (S$297.4 million) to its costs in the second half of 2025, having impacted its second quarter results by “double-digit” millions of euros.
The United States said earlier in July it would impose a 20 per cent levy on many Vietnamese exports and a 19 per cent tariff on goods from Indonesia, as it struck trade deals with the countries.
Vietnam and Indonesia, Adidas’ two biggest sourcing countries, made up for 27 per cent and 19 per cent of the company’s products respectively as at 2024.
The German sportswear brand said its inventories were up 16 per cent to €5.26 billion at the end of June, as it front-loaded product purchases into the US ahead of tariffs.
It reported strong second-quarter profits as consumers keep snapping up retro sneaker models like the Samba despite growing economic uncertainty.
Adidas posted an operating profit of €546 million in the quarter, exceeding the €503 million average of analyst estimates. Revenue of €6 billion came in just shy of expectations, weighed down by the stronger euro.
Adidas has been riding a two-year hot streak that kicked off with the revival of its classic Samba and has since expanded to include other three-striped, retro-looking shoe models. That has generated buzz with customers from Latin America to China, boosting demand for the brand’s apparel and performance sports products while helping close the gap with rival and industry leader Nike.
But for the second straight quarter, chief executive Bjorn Gulden said that uncertainty around the impact of US tariffs kept him from possibly raising the company’s outlook for the year.
Adidas said it still expects to generate operating profit of between €1.7 billion and €1.8 billion in 2025.
“We currently feel confident to deliver it, but of course this might change – also upwards should headwinds be less than we currently assume,” Mr Gulden said in the statement. “We do also not know what the indirect impact on consumer demand will be should all these tariffs cause major inflation.” REUTERS, BLOOMBERG
