Adidas Reports Tariff-Driven Setback Despite Strong Profit Surge

German sportswear titan Adidas announced on Wednesday that it experienced a financial setback in the second quarter of 2025 due to US-imposed tariffs, although it has not indicated whether these rising costs will be passed on to consumers. Despite the disruption, the company reported a substantial 90% increase in net profit, supported by strong sales across its sports and lifestyle segments.

Financial Snapshot – Q2 2025

Impact of US Tariffs

Adidas stated that tariffs implemented under former US President Donald Trump’s trade policy had a “negative impact in the double-digit million euro range” for Q2. The company further expects an additional €200 million burden in the second half of 2025.

However, it remains unclear whether Adidas will raise retail prices to offset these costs. CEO Bjørn Gulden cautioned that passing on higher costs to consumers could suppress demand if tariffs cause broader inflation.

“We do also not know what the indirect impact on consumer demand will be should all these tariffs cause major inflation.”
— Bjørn Gulden, CEO, Adidas

Outlook for Full-Year 2025

Despite the uncertainty, Adidas has maintained its previous full-year guidance, forecasting:

• Operating profit: between €1.7 billion and €1.8 billion

However, Gulden noted a “range of possible outcomes”, warning that ongoing trade tensions could either boost or dampen final results.

Strategic Position and Recovery

Adidas has made a significant turnaround since the fallout of its 2022 split with US rapper Kanye West, following his antisemitic remarks, which led to the collapse of their lucrative Yeezy sneaker line. Under Gulden’s leadership, the company has re-emphasised its classic trainer lines, driving recent sales momentum.

“We feel the volatility and uncertainty in the world does not make this [bullishness] prudent.”
— Bjørn Gulden

Global Supply Chain Exposure

Adidas manufactures a large portion of its products in tariff-affected countries such as Vietnam and Indonesia. Its vast international supply chain, once a strength, now leaves it vulnerable to escalating trade barriers, particularly under unilateral tariff regimes like those introduced by the US.

Summary Table

While Adidas has demonstrated a resilient financial recovery, geopolitical instability and trade policy continue to cloud the horizon for the globally integrated brand.