Adidas, the world’s second-largest sports retailer, is grappling with increased economic uncertainty as it navigates the implications of U.S. tariffs. The company, led by CEO Bjørn Gulden, reported a notable uptick in second-quarter sales despite facing challenges posed by a fluctuating macroeconomic environment. As of 8:40 a.m. London time, Adidas’ shares fell by 9.1%, reflecting investor concerns over potential impacts on consumer demand.
In its most recent quarterly results, Adidas reported a 2% year-on-year rise in revenues. The firm brought in €5.95 billion for the quarter ending June 30. Operating profit tripled in the past year, increasing 58% year-over-year to €546 million. This remarkable growth was well above expectations, which had anticipated it reaching only €518 million.
Even as these positive signs were underway, Adidas warned of headwinds for performance going forward. The company maintained its full-year guidance but highlighted “elevated uncertainty due to U.S. tariffs and macroeconomic risks.” Gulden emphasized the negative pressures these tariffs could place on consumer behavior.
“We do also not know what the indirect impact on consumer demand will be should all these tariffs cause major inflation,” – Bjørn Gulden.
Looking forward, Adidas still expects its full-year currency-neutral sales to grow in high-single-digits. Additionally, the company expects operating profit to increase from €1.7 billion to €1.8 billion over the year. On the downside, it flagged a negative currency impact of €300 million. Moreover, it expects tariff-related costs to reach €200 million ($231 million) in the year’s second half.
The U.S. market has been the most challenging sales growth environment for Adidas. This unfortunate trend underscores just how deep the brand’s challenges run in such a key region. Analysts widely agree that the company needs to change with these tides. To continue being a market leader and a profitable company they will need to do so.