The sportswear industry faces notable strain as Adidas confirmed plans to increase prices across its American product lines, citing mounting pressures from international tariff measures.
CEO Bjørn Gulden acknowledged the company’s heavy reliance on overseas manufacturing leaves it exposed to shifting U.S. trade policies, with rising costs expected to impact consumer pricing.
President Donald Trump’s tariffs—including a 145% levy on Chinese imports and paused duties of up to 49% on Southeast Asian nations—have disrupted supply chains for major apparel brands. Adidas, which manufactures footwear such as the Superstar and Gazelle models in Vietnam, Cambodia, and Indonesia, warned that even baseline 10% tariffs on most trading partners will drive up expenses.
“We cannot produce almost any of our products in the U.S., so these tariffs will eventually cause higher costs for all our offerings there,” Gulden stated. While the company has minimised exports of China-made goods to the U.S., it remains vulnerable to tariff hikes affecting other manufacturing hubs. Vietnam, a critical production base for Adidas and rivals like Nike, narrowly avoided 46% duties in April after a temporary freeze.
Despite these challenges, Adidas reported a 155% surge in first-quarter net income to $496 million, surpassing forecasts. Sales climbed 12.7% to $7 billion, driven by robust demand for lifestyle apparel and footwear.
The company also resolved its long-running Yeezy partnership complications by offloading remaining inventory, removing a key drag on earnings. However, ongoing trade uncertainties have forced Adidas to maintain its 2025 financial guidance rather than upgrading projections.
“Under normal circumstances, our performance would justify raising forecasts, but tariff volatility has prevented this,” the company noted. Analysts at Deutsche Bank described the results as a “good print” but highlighted risks from an “expanded range of possible outcomes.”
Adidas joins firms including Skechers, Delta, and PepsiCo in recalibrating strategies due to trade instability. Most footwear brands now confront a difficult choice—absorb escalating costs or risk reducing consumer demand through higher prices.
With negotiations between the U.S. and exporting nations still ongoing, Adidas emphasised that final pricing decisions hinge on unresolved trade terms. “We cannot quantify the exact increases or their effect on shoppers yet,” the company cautioned.
North America, representing 20% of Adidas’s global sales, remains particularly susceptible to pricing fluctuations. The brand’s wholesale channels outperformed direct-to-consumer sales in early 2025, suggesting bulk buyers may initially absorb cost pressures. Meanwhile, paused tariffs on Southeast Asia are set for re-evaluation in July, adding further unpredictability.