Adidas Faces Rising Tariff Challenges Amid Sales Hiccup

Adidas shares fell as Q2 sales missed expectations. U.S. tariffs could increase costs by €200 million, forcing potential price hikes. CEO Bjorn Gulden highlighted uncertainties surrounding tariffs' impact on demand. Sales grew 2.2%, but below estimates. Footwear tariffs from Vietnam and Indonesia rose sharply, affecting Adidas' sourcing strategy.

Adidas shares dropped 7% on Wednesday morning after the company reported second-quarter sales that failed to meet expectations, compounded by warnings of increased costs due to U.S. tariffs. The sportswear giant noted that these tariffs could add around €200 million ($231 million) in costs for the latter half of the year, attributing the burden to President Donald Trump's unpredictable trade policies.

In a statement, CEO Bjorn Gulden expressed uncertainty over the final tariff figures and their impact on consumer demand, suggesting that pricing adjustments in the U.S. might be necessary. The company's sales for the quarter, adjusted for currency variations, reached 5.95 billion euros, indicating a 2.2% rise but still falling short of analysts' projections.

Adidas, which saw a 16% rise in inventories due to frontloading shipments, faces increased tariffs on footwear from principal sourcing countries Vietnam and Indonesia. Despite these challenges, Adidas reported a growth in its 'lifestyle' revenues, bolstered by creative collaborations and product offerings. The brand's operating profit stood at 546 million euros, surpassing analyst expectations.

(With inputs from agencies.)