Adidas Warns: US Tariffs Will Boost Prices

Adidas cautioned on Tuesday that the tariff measures imposed by U.S. President Donald Trump would lead to higher costs for their goods sold in America, potentially hampering the company’s current rebound.
The company produces a significant portion of its products in Asian nations that former President Trump criticized for maintaining substantial trade surpluses with the U.S., such as China, which currently endures the most severe tariffs imposed by America.
CEO Bjorn Gulden stated that Adidas has decreased its shipments from China to the United States "to nearly nothing," however, he also mentioned that the company remains "partially vulnerable" due to the significantly elevated tariffs.
The situation becomes more dire due to the overall rise in U.S. tariffs coming from every exporting country," he stated, noting that these "will inevitably lead to increased expenses for all our goods targeting the American market.
He stated that it was "not currently feasible" to determine the extent of price increases or to assess the effect this could have on consumer demand.
A significant portion of Adidas's manufacturing takes place in various Asian nations such as Vietnam, Indonesia, and Bangladesh. The United States plays a crucial role as one of Adidas's key markets, where the company generated more than 20% of its revenues last year.
The U.S. tariffs have struck the firm a significant setback precisely when it was beginning to recover from a difficult spell initiated by the termination of its profitable association with American artist Kanye West.
The team created the well-known Yeezy line of sneakers with West, but they stopped working together following the musician’s controversial antisemitic remarks online, which cost Adidas a significant source of income.
Between January and March, Adidas announced that its net income nearly tripled to 428 million euros ($488 million), surpassing analysts' forecasts, with revenues climbing to 6.1 billion euros.
Gulden stated that usually, following such robust performance, the group would increase its forecast. However, they chose not to do so because of the uncertainties surrounding the tariffs.
The team adhered to their forecast, anticipating an operating profit ranging from 1.7 billion to 1.8 billion euros for the year.
The CEO also noted that Adidas acknowledged "certain uncertainties which might exert downward pressure on performance as the year progresses."
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