Adidas Expects $140 Million Hit from Trump Tariffs

German sportswear giant Adidas has announced that it anticipates a significant financial impact from the tariffs imposed by US President Donald Trump. According to Adidas CEO Bjorn Gulden, the company expects to incur a cost of roughly 120 million euros ($140 million) for the year. This estimate is lower than the initial warning of 200 million euros issued in July.

The tariffs are expected to affect Adidas predominantly in the final months of the year. As the company produces over 90% of its output in Asia, firms shipping Adidas products to the United States are subject to substantial import levies. North America accounted for more than 20% of Adidas’ sales last year, making it a crucial market for the company.

Although the estimated cost is lower than initially predicted, Gulden emphasized the difficulty in gauging the indirect impact of the tariffs, particularly in terms of price increases. “We don’t know how the consumer will react in the US when these higher prices come into effect,” he stated.

In the third quarter, North American sales declined by 5% to 1.3 billion euros, attributed to the tariffs and the discontinuation of the Yeezy sneaker line. The company had collaborated with rapper Ye, formerly known as Kanye West, on the line but terminated the partnership after he made antisemitic remarks on social media.

To counterbalance the decline, Adidas is investing heavily in US college sports, aiming to catch up with industry leader Nike. Gulden acknowledged the significant gap between Adidas and Nike in the US market, stating, “The distance to Nike in the US is so big that we cannot have the ambition of being number one.” However, he expressed the company’s ambition to double its business in the US, without providing a specific timeline.

Earlier this month, Adidas revised its full-year core profit forecast upwards to 2 billion euros, from a previous range of 1.7 to 1.8 billion euros. The company’s financial projections and strategic investments will be closely monitored as it navigates the challenges posed by the tariffs and the competitive US market.