Adidas Struggles with Revenue Miss in Second Quarter
Adidas, the German sportswear giant and Europe’s largest manufacturer in its category, reported disappointing results for the second quarter of 2025. The company announced on July 30 that its net sales reached 5.95 billion euros ($6.88 billion), reflecting a modest year-over-year increase of 2.2 percent on a currency-adjusted basis. However, this figure fell short of the consensus estimate of 6.15 billion euros, signaling challenges in meeting market expectations.
The shortfall has raised concerns among investors, with Adidas shares dropping by 7.5 percent in early trading following the announcement. The company’s performance underscores broader difficulties in navigating global economic conditions, particularly in key markets like the United States, where external pressures are impacting profitability.
US Tariffs Drive Costs Up, Threaten Price Increases
A significant factor contributing to Adidas’ struggles is the impact of U.S. tariffs on imported goods. The company disclosed that it has already experienced a negative financial hit in the double-digit euro millions during the second quarter due to these tariffs. Looking ahead, Adidas anticipates an even larger burden, estimating an additional cost of up to 200 million euros ($231 million) for the remainder of 2025.
CEO Bjørn Gulden addressed the issue in a company statement, noting, 'We have already had a negative impact in the double-digit euro millions in the second quarter, and the latest indications of tariffs will directly increase the cost of our products for the U.S. with up to 200 million euros during the rest of the year.' This stark warning highlights the direct correlation between tariff policies and consumer pricing, with Adidas confirming plans to raise prices on U.S. products to offset these costs.
The potential price hikes could affect a wide range of Adidas products sold in the U.S., as nearly half of the company’s goods are manufactured in Asian countries subject to these tariffs. Gulden also indicated that the company is reviewing its product slate to determine which specific items might see price adjustments, adding another layer of uncertainty for American consumers.
Outlook Amid Global Uncertainty
Despite the revenue miss and tariff challenges, Adidas has maintained its full-year profit forecast, projecting operating earnings between 1.7 billion and 1.8 billion euros for 2025. However, the company remains cautious, citing global economic volatility and geopolitical tensions as ongoing risks. The tariff burden in the U.S. market, in particular, continues to loom large over its strategic planning.
The sportswear giant is not alone in grappling with such issues, as other multinational corporations face similar pressures from trade policies. For Adidas, balancing cost increases with consumer demand will be critical in the coming months. As the company navigates these headwinds, stakeholders are keenly watching how it adapts to maintain its competitive edge in a challenging global landscape.