The company, heavily reliant on manufacturing in Vietnam and Indonesia—both affected by recently imposed tariffs—has acknowledged the uncertainty surrounding the potential demand impact on consumers.
Adidas CEO Bjorn Gulden disclosed in their latest financial report that nearly half of the brand's products are manufactured in Asia and that the resultant tariffs will directly affect pricing in the US market. Notably, Vietnam accounts for 27% of Adidas' production, while Indonesia provides another 19%. The new trade agreements recently established with both countries include a 20% tariff on goods from Vietnam and a 19% tariff on goods from Indonesia.
Despite the financial strain from tariffs, Adidas has shown resilience, reporting a 7.3% surge in sales to €12.1 billion for the first half of the year, with substantial profit growth from €549 million to €1 billion. Notably, sales of footwear rose by 9% from April to June, while clothing revenues climbed by 17%.
Adidas is not alone in facing the repercussions of the tariff increases; rival Nike also announced price hikes in May and warned that the cumulative tariffs could escalate costs by approximately $1 billion (£730 million).
The ongoing trade tensions and tariffs, a result of former President Trump's policies aimed at encouraging domestic manufacturing, have prompted mixed reactions from major EU economies, with German Chancellor Friedrich Merz expressing concerns over potential damage to both German and US interests.
Amidst these developments, companies like Mercedes-Benz and Porsche highlighted the financial impacts, with Mercedes-Benz anticipating a €420 million loss due to tariffs, while Porsche adjusted pricing to accommodate the increased tax burden. As businesses navigate these escalating costs, the outlook remains uncertain on how the consumer market will respond.
Adidas CEO Bjorn Gulden disclosed in their latest financial report that nearly half of the brand's products are manufactured in Asia and that the resultant tariffs will directly affect pricing in the US market. Notably, Vietnam accounts for 27% of Adidas' production, while Indonesia provides another 19%. The new trade agreements recently established with both countries include a 20% tariff on goods from Vietnam and a 19% tariff on goods from Indonesia.
Despite the financial strain from tariffs, Adidas has shown resilience, reporting a 7.3% surge in sales to €12.1 billion for the first half of the year, with substantial profit growth from €549 million to €1 billion. Notably, sales of footwear rose by 9% from April to June, while clothing revenues climbed by 17%.
Adidas is not alone in facing the repercussions of the tariff increases; rival Nike also announced price hikes in May and warned that the cumulative tariffs could escalate costs by approximately $1 billion (£730 million).
The ongoing trade tensions and tariffs, a result of former President Trump's policies aimed at encouraging domestic manufacturing, have prompted mixed reactions from major EU economies, with German Chancellor Friedrich Merz expressing concerns over potential damage to both German and US interests.
Amidst these developments, companies like Mercedes-Benz and Porsche highlighted the financial impacts, with Mercedes-Benz anticipating a €420 million loss due to tariffs, while Porsche adjusted pricing to accommodate the increased tax burden. As businesses navigate these escalating costs, the outlook remains uncertain on how the consumer market will respond.
