If you’re shopping for Sambas, Gazelles, or Superstars in the U.S., prepare to pay more thanks to the Trump administration’s tariffs. “The latest indications of tariffs will directly increase the cost of our products in the U.S.,” Adidas CEO Bjørn Gulden told analysts yesterday (July 30) after the German sportswear giant reported lackluster second-quarter earnings. He emphasized that the price hikes would affect only the U.S. market, leaving global prices unchanged.
Adidas and other athletic shoemakers have been hit hard by the Trump administration’s unprecedented levies on nations known for their low-cost manufacturing. Vietnam and Indonesia—Adidas’ second- and third-largest suppliers (making 27 percent and 19 percent of its products, respectively)—now face tariffs of 20 percent and 19 percent.
These levies have already taken a financial toll. Adidas reported a negative impact in the double-digit millions of euros last quarter, a figure Gulden said will rise to 200 million euros ($228 million) by year’s end.
Still, the CEO is more worried about the potential backlash from U.S. consumers. “What I’m mostly worried about, to be honest, is not only the cost but it’s also what is going to be the consumer reaction in the market,” said Gulden. No final decision has been made on the size or timing of price increases, though Gulden indicated Adidas may follow competitors’ lead.
The announcement weighed on Adidas shares, which fell 11 percent after the company disclosed its tariff-related challenges alongside underwhelming second-quarter results. While operating profit rose 58 percent year-over-year to 546 million euros ($623 million) between April and June, revenue fell short of analyst expectations at 5.95 billion euros ($6.79 billion).