German sportswear giant Adidas (ADSGn.DE) announced on Wednesday that new U.S. import tariffs are expected to have a €120 million ($140 million) direct impact on its 2025 operating profit, with the most significant financial blow anticipated in the fourth quarter.

During a media call, CEO Bjørn Gulden said the company is closely monitoring the evolving trade situation and its ripple effects on consumer spending in the U.S. market.

“The indirect impact of the tariffs, we don’t know. We do not know how the consumer will react in the U.S. when these higher prices come into effect,” Gulden stated.

Adidas Adjusts Pricing Strategy Amid Tariff Pressure

In response to the tariff hikes imposed by the U.S. government, Adidas has increased product prices in the American market to cushion the financial blow. However, the company acknowledges that the long-term implications of these adjustments on consumer demand and brand competitiveness remain uncertain.

The company, which manufactures a substantial portion of its footwear and apparel in Asia, could face additional cost pressures if U.S. tariffs continue to target imported goods from key sourcing countries.

Economic and Consumer Headwinds

Adidas’ warning comes as global companies grapple with the wider fallout from escalating U.S. trade policies and tariff disputes. The measures are part of a broader set of economic tensions affecting multinational firms dependent on cross-border supply chains.

Gulden emphasized that while Adidas remains confident in its brand strength and pricing power, shifts in U.S. consumer sentiment—especially in a period of inflationary pressures—could add unpredictability to future earnings.

Strategic Focus and Market Adaptation

To mitigate the effects of tariffs and preserve profit margins, Adidas is accelerating efforts to:

• Diversify its supply chain and reduce dependency on single-country manufacturing.
• Strengthen direct-to-consumer (DTC) channels, particularly e-commerce, to maintain control over pricing and margins.
• Optimize regional production strategies to serve the North American market more efficiently.

Industry analysts suggest that these tariffs could lead to price-sensitive consumers shifting toward lower-cost competitors, though Adidas’ premium brand positioning may help cushion the impact in the medium term.

Outlook for 2025

Despite the setback, Adidas continues to project steady revenue growth supported by global demand for flagship products such as the Adidas Samba, Gazelle, and Ultraboost lines. However, the profit hit underscores the company’s exposure to geopolitical and trade-related risks.

As of now, the company has not revised its full-year 2025 guidance, but the fourth quarter will be closely watched for signs of consumer adaptation to higher retail prices.

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