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Adidas has warned that new US tariffs will lead to higher prices for its popular trainers such as the Samba and Gazelle, as the German sportswear group said trade turmoil had “put a stop to” an outlook upgrade.
“Since we currently cannot produce almost any of our products in the US, these higher tariffs will eventually cause higher costs for all our products for the US market,” chief executive Bjørn Gulden said in a statement on Tuesday.
He added that “cost increases . . . will eventually cause price increases, not only in our sector”, and it was “currently impossible” to quantify the rises or gauge what impact they might have on demand.
Manufacturers of trainers, such as Adidas, are among the companies hit hardest by the Trump administration’s tariffs, owing to their heavy reliance on countries such as China and Vietnam for production. The US lacks factories with the specialised equipment to make running shoes and workers who can operate them.
Although Adidas has scaled back exports from China to the US — its US business now sources only 3 per cent of its products from China — Gulden said the company remained “somewhat exposed” to the huge tariffs between the two countries.
However, he warned that smaller US tariffs on countries in south-east Asia, including Vietnam, were having an “even worse” impact.
Like many other companies, Adidas frontloaded shipments into the US to build up inventory ahead of new tariffs, which came into effect at the start of the month. The company also rerouted products originally destined for the US to other markets.
Gulden said that in a “normal world”, Adidas would have upgraded its full-year revenue and operating profit targets following a strong first quarter, but ongoing uncertainty over US trade policy had “put a stop to this”.
However, he noted there had been no order cancellations from retailers so far and customers had not changed their behaviour, as the impact of tariffs had not yet become “visible”.
Adidas last week reported preliminary results showing operating profit had almost doubled to €610mn in the first three months of the year, marking its strongest sales performance for the period in company history.
Sales rose by double digits across all markets except the US, where the termination of its Yeezy partnership with rapper Kanye West continued to drag on revenues. Growth was led by strong demand for retro footwear lines such as the Samba, as well as the newly launched Taekwondo model.
Gulden said that Adidas’s lower reliance on the US, which accounts for only around one-fifth of its revenues, gave it an advantage over more “America-oriented” brands, in an apparent reference to larger US rival Nike.
Adidas shares fell as much as 2 per cent on Tuesday. The stock had recovered most of its earlier losses after steep US tariff increases announced earlier this month were partially suspended.
Adidas shares have outperformed rivals after the company made strong progress on its turnaround under Gulden. Over the past 12 months its shares have declined by 8 per cent, outperforming those of Puma and Nike, whose share prices have dropped by 48 per cent and 39 per cent respectively.
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