German sportswear giant Adidas has announced that it expects US President Donald Trump’s latest tariff measures to cost the company around €120 million ($140 million) this year.
Chief Executive Officer Bjorn Gulden disclosed this during a call with analysts on Wednesday, noting that “most of the impact” will be felt in the final months of the year.
The company explained that over 90 percent of its products were manufactured in Asia last year, exposing it to high import levies on goods shipped into the United States. North America accounted for more than 20 percent of Adidas’s total sales in the same period.
Although the projected €120 million tariff cost is lower than the €200 million the company warned of in July, Gulden said the overall effect on consumer behavior remains uncertain. “We don’t know how the consumer will react in the US when these higher prices come into effect,” he said.
In the third quarter, Adidas recorded a five percent decline in North American sales, falling to €1.3 billion, a drop attributed to the tariffs and the discontinuation of its Yeezy sneaker line. The Yeezy brand, a collaboration with rapper Ye (formerly known as Kanye West), was terminated after the artist made antisemitic remarks on social media.
Despite the challenges, Gulden said Adidas remains committed to expanding its US presence, with significant investments in college sports. “The distance to Nike in the US is so big that we cannot have the ambition of being number one,” he said. “But we should have the ambition to double our business,” he added, without specifying a timeline.
Earlier in October, Adidas raised its full-year core profit forecast to €2 billion, up from a previous projection of between €1.7 billion and €1.8 billion.
AFP
