Adidas shares dropped about 7% on Wednesday following the company’s warning that rising U.S. tariffs could increase the cost of its products in America. The German sportswear giant expects tariff-related expenses to reach roughly 200 million euros in the second half of the year, putting pressure on profits and pricing.
CEO Bjørn Gulden stated during an earnings call, “The price increases, if any, will only be in the U.S.” Shares initially fell as much as 9% before partially recovering.
So far, Adidas has not raised prices but has adjusted its sourcing to offset costs. A pricing review will occur after final tariff rates are confirmed around August 1, with any price increases more likely to affect new products.
“What we can say is we will not be the price leaders. We will move slowly and see what is happening in the market,” Gulden said.
Adidas also expressed concerns that tariffs could trigger inflation and dampen U.S. consumer demand.
“Tariffs, and especially the uncertainty, make things difficult right now,” said Gulden. “We do also not know what the indirect impact on consumer demand will be should all these tariffs cause major inflation.”
Despite these challenges, Adidas maintained its full-year forecast, expecting currency-neutral sales to grow in the high single digits and operating profit between 1.7 billion and 1.8 billion euros. However, continued uncertainty remains due to geopolitical and economic risks.
Adidas reported weaker-than-expected second-quarter sales of 5.95 billion euros, hindered partly by currency effects, with the U.S. market showing the slowest growth. Operating profit grew 58% to 546 million euros, beating analyst estimates.
The company’s cautious approach to price changes and supply chain adjustments will be critical as tariff details become clearer.