Adidas recently announced a crucial shift in pricing due to rising US tariffs, which will cost the brand an extra €200 million (approximately £173 million). Nearly half of Adidas's products come from Asian countries that have recently established trade agreements with the US. CEO Bjorn Gulden stated these tariffs will directly affect prices for US customers, leading to uncertainty about how demand will be impacted.
Vietnam and Indonesia are the two largest suppliers of Adidas products, contributing 27% and 19% respectively. With the US imposing a tariff of 20% on Vietnamese goods and 19% on Indonesian imports, local retailers must bear the brunt. While the company is unable to produce the majority of its products domestically, they are not the only sneaker brand feeling the pinch; Nike also announced price increases due to similar tariff pressures.
Despite these challenges, Adidas showcased a robust 7.3% sales growth in the first half of the year, reaching €12.1 billion in total revenue. Notably, footwear sales surged by 9% in the second quarter, while clothing revenue skyrocketed by 17%. Although these figures seem promising, the looming question of customer demand in light of price increases remains.
In the international trade landscape, higher tariffs imposed by the US are a key issue, prompting concerns among global leaders and businesses alike. Alongside Adidas, luxury carmakers in Germany are voicing their grievances over tariff impacts, which have led to significant profit declines and even price hikes. Thus, while Adidas enjoys rising sales, the question of future demand amid rising costs lingers in the air.
Vietnam and Indonesia are the two largest suppliers of Adidas products, contributing 27% and 19% respectively. With the US imposing a tariff of 20% on Vietnamese goods and 19% on Indonesian imports, local retailers must bear the brunt. While the company is unable to produce the majority of its products domestically, they are not the only sneaker brand feeling the pinch; Nike also announced price increases due to similar tariff pressures.
Despite these challenges, Adidas showcased a robust 7.3% sales growth in the first half of the year, reaching €12.1 billion in total revenue. Notably, footwear sales surged by 9% in the second quarter, while clothing revenue skyrocketed by 17%. Although these figures seem promising, the looming question of customer demand in light of price increases remains.
In the international trade landscape, higher tariffs imposed by the US are a key issue, prompting concerns among global leaders and businesses alike. Alongside Adidas, luxury carmakers in Germany are voicing their grievances over tariff impacts, which have led to significant profit declines and even price hikes. Thus, while Adidas enjoys rising sales, the question of future demand amid rising costs lingers in the air.
