Adidas anticipates a $230 million financial impact from tariffs in the latter part of the year.
Adidas Navigates Tariffs and Maintains Growth Amidst Competition
Adidas, the German sportswear giant, reported a 2% increase in its second-quarter revenue, reaching approximately 6 million euros. The company's sales saw a significant boost in currency-neutral terms, with a 12% growth excluding Yeezy sales and an 8% increase including them. However, the strong euro was cited as a factor for slower growth in the second quarter.
To manage the impacts of U.S. tariffs, Adidas has strategically diversified its supply chains, localized production, and implemented premium pricing strategies. By nearshoring production to Mexico and Brazil, the company reduces its exposure to tariffs and logistical risks. It also leverages efficiency improvements in its supply chain, using AI and blockchain technology to drive operational agility.
In response to tariff cost pressures, estimated to increase U.S. expenses by around €200 million ($230 million USD) in 2025, Adidas plans to selectively raise prices on certain new products while maintaining stable prices on popular existing SKUs. The aim is to balance margin preservation and consumer demand sensitivity.
Despite these challenges, Adidas projects 7-8% sales growth in 2025 and margin expansion potential of 19% by 2026, reflecting confidence in pricing power and brand strength.
In the U.S., Adidas capitalises on strong brand loyalty and retro-inspired designs, such as Samba and Campus sneakers, which resonate well with consumers. This cultural relevance supports its growth ambitions in the U.S., a key market contributing about one-fifth of Adidas’s sales. The company is also investing heavily to expand its U.S. business, aiming to double it over time.
Adidas is boosting demand through collaborations, like with rock band Oasis, and by growing its lifestyle segment with trendy prints and sneaker variants. These strategies help offset macroeconomic headwinds like currency fluctuations and inflation pressures.
Adidas' Originals lines are experiencing high demand, and the company is relaunching its popular Superstar shoe with activations and collaborations. Meanwhile, rival Puma recently reported a sales drop and a guidance cut.
In the apparel category, Adidas is making inroads, with currency-neutral sales up 17% in Q2. Retailers are reworking stores to suit shoppers by implementing complementary shop-in-shops, age-appropriate experiences, and integrated technology.
Despite Adidas not leading the way on price increases in the U.S. due to tariffs, the company plans to share the costs with suppliers and retailers. GlobalData apparel analyst Tom Ljubojevic states that Adidas' currency-neutral growth highlights a continuing strong appetite among consumers.
CEO Bjørn Gulden stated that Adidas will not raise prices in any other market due to potential price increases in the U.S. due to tariffs. Adidas' low-profile trainers are popular, supported by increased supply and relaunches of styles such as the Tokyo and Japan.
In its local strategy, especially in the U.S., Adidas is making significant strides, especially in college sports. The company is increasing marketing investments while rival Nike experiences sales declines.
In summary, Adidas is navigating tariffs and geopolitical risks by diversifying and localizing its supply chain, applying selective premium pricing, and driving brand-centric, culturally relevant product innovation to maintain competitive strength in the U.S. market.
- Adidas, in addition to its sportswear division, extends its influence into music and lifestyle, collaborating with rock band Oasis and launching trendy prints and sneaker variants.
- To combat inflation and currency fluctuations, Adidas persists in striking collaborations and expanding its lifestyle segment, such as the relaunch of its Superstar shoe.
- Amidst the financial landscape of business and finance, Adidas demonstrates a steady growth, aiming to double its U.S. business and projecting a 7-8% sales growth in 2025.
- In the rapid-changing realm of technology and AI, Adidas streamlines its supply chain efficiency, leveraging AI and blockchain technology to drive operational agility.
- Adidas' strategy in labor management entails sharing tariff costs with suppliers and retailers, while maintaining competitive pricing in markets outside of the U.S.
- As sports rivalry unfolds, Adidas distinguishes itself in the apparel category, registering a 17% currency-neutral sales growth in Q2, setting itself apart from other fashion brands like Puma, now experiencing sales drops.
