Adidas records Q2 tariffs hit, flags cost increases
By Linda Pasquini and Helen Reid
LONDON(Reuters) -Sportswear brand Adidas warned on Wednesday that it may have to hike prices in the United States, after reporting U.S. tariffs would add around 200 million euros ($231 million) to costs in the second half.
Shares in Adidas dropped 11% in their worst day since U.S. President Donald Trump unveiled higher tariffs in April, bringing the stock's losses since the start of this year to 26%.
Adidas said uncertainty over trade was holding it back from increasing its annual guidance, and it had not yet decided on possible U.S. price increases to mitigate the impact.
On a call with analysts, CEO Bjorn Gulden emphasised that the final tariff levels were still not known, but said he was concerned about the knock-on impact of higher prices on U.S. consumer demand.
"What I'm mostly worried about, to be honest, is not only the cost but it's what is going to be the consumer reaction in the market with all these price increases that I think will come not only in our sector, but in general in the U.S.," said Gulden.
"Should we get mega inflation in the U.S., things will happen on the demand side, then of course volumes will go down."
Adidas will review its pricing and decide which products it could hike prices on in the U.S. once tariffs are finalised, Gulden said, declining to say how much prices might increase.
"We will try to keep the prices on known models (stable) as long as we can, and then do new pricing on product that hasn't existed before," he said.
Adidas sales increased 2.2% in euro terms to 5.95 billion euros ($6.9 billion) in the second quarter, lower than analysts' average estimate of 6.2 billion euros, according to data compiled by LSEG.
The shortfall will likely fuel concerns that, after a run of very strong sales growth fuelled by its trendy three-striped multicoloured Samba and Gazelle shoes, Adidas is losing momentum.
"For investors to view this as a temporary setback, the company will need to deliver a reassuring message regarding the outlook for H2 and the early 2026 order book," UBS analyst Robert Krankowski said in a note to clients.
FOOTWEAR TARIFFS
The U.S. earlier this month announced a 20% levy on many Vietnamese exports and a 19% tariff on goods from Indonesia - Adidas' two biggest sourcing countries which produce 30% and 23% respectively of Adidas products sold in the U.S.
Footwear imports into the U.S. already faced tariffs before Trump, and the new duties mean tariffs on footwear from Vietnam have gone up to 46%, from 26%, and from Indonesia to 43% from 24%, Gulden said.
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