Adidas shares drop after sales miss expectations, flags €200m tariff cost
Highlighting the impact of US President Donald Trump's volatile trade policies, Adidas said uncertainty was holding it back from increasing its annual guidance despite reporting a stronger than expected second-quarter profit.
"We still do not know what the final tariffs in the US will be," CEO Bjorn Gulden said in a statement. Another unknown is the indirect impact on consumer demand if the tariffs cause "major inflation", he added.
The company's net sales, adjusted for currency swings, rose 2.2% to €5.95 billion in the quarter, lower than analysts' average estimate of €6.2 billion, according to data compiled by LSEG.
The result will fuel fears that, after a run of very strong sales growth fuelled by its trending three-striped multicoloured Samba and Gazelle shoes, Adidas is losing momentum.
"For investors to view this as a temporary setback, the company will need to deliver a reassuring message regarding the outlook for H2 and the early 2026 order book," UBS analyst Robert Krankowski said in a note to clients.
The US earlier this month announced a 20% levy on many Vietnamese exports and a 19% tariff on goods from Indonesia. Adidas' two biggest sourcing countries, Vietnam and Indonesia produced 27% and 19% of Adidas' products respectively as of 2024.
Like many other sportswear companies, including Puma, Adidas has frontloaded product purchases into the US to try to beat tariffs, driving its inventories up 16% to €5.26 billion at the end of June.
Adidas is also having to contend with a stronger euro and weaker dollar, which hit sales by around €300m in the quarter to June.
Adidas' quarterly operating profit reached €546m, ahead of analysts' expectations for €520m.
Its gross margin increased by 0.9 percentage points to 51.7% in the quarter, as reduced discounting and lower product and freight costs mitigated the impacts from currencies and tariffs.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Irish Times
26 minutes ago
- Irish Times
Trump envoy to visit Moscow this week before deadline for ending Ukraine war
Donald Trump 's special envoy is expected in Moscow days before the US president's deadline on Friday for Russia to make progress on ending the war in Ukraine or face increased US sanctions. Mr Trump said Steve Witkoff would visit Moscow on Wednesday or Thursday. When asked what message Mr Witkoff would take to Russia and what Vladimir Putin could do to avoid new sanctions, the US president answered: 'Yeah, get a deal where people stop getting killed.' In Kyiv, there is little expectation Mr Witkoff will make a breakthrough with Mr Putin, but a hope that Mr Trump's changed rhetoric and tougher stance on Moscow may lead to a real change in US support for Ukraine. Sources in Kyiv said they expected Keith Kellogg, Mr Trump's Ukraine envoy, to visit the country towards the end of the week, possibly to coincide with Mr Witkoff's visit to Moscow. Mr Trump came into office convinced he could do a deal with Mr Putin, but in recent weeks appears to have become increasingly frustrated with Russia's actions. On Thursday he described its continued attacks on civilian areas in Ukraine as 'disgusting' and on Sunday said that two nuclear submarines that he ordered to be deployed after online threats from the former Russian president Dmitry Medvedev were now 'in the region', without giving further details. READ MORE Mr Trump had initially announced in July a 50-day deadline for Russia and Ukraine to end the war, but said last week he no longer believed Russia was serious about ending the war and shortened it to '10 or 12' days, later clarified as this Friday, August 8th. Mr Trump has previously said the new measures he has in mind if the deadline is not met could involve 'secondary tariffs' targeting Russia's remaining trade partners, such as China and India. [ Russia urges caution over nuclear rhetoric in response to Trump's submarine order Opens in new window ] Mykhailo Podolyak, an aide to Volodymyr Zelenskiy , said if Russia did not change its course by Friday, Kyiv would expect the 'irreversible logistics' of secondary sanctions on Russian oil exports to be set in motion. 'After that he'll look whether this is helping to bring about the end of the war or not, and if not then he will move to the next step,' said Mr Podolyak, in an interview in Kyiv. The next move, he said, could be further sanctions, and the increased militarisation of Ukraine. 'Trump has already said he's ready to sell Europe as much weapons as they want [to pass to Ukraine]. Before he didn't say that … This is already a different conception of the world,' he said. Before that, though, all eyes will be on Mr Witkoff's visit to Moscow. On previous trips, he has held long one-on-one meetings with Mr Putin and has spoken of his warm feelings for the Russian leader. The camaraderie has left both Kyiv and other US allies wondering whether Mr Witkoff is capable of delivering harsh messages to Moscow, although his visit this week will be the first since Mr Trump's rhetoric on Ukraine became noticeably harsher. The Kremlin said on Monday it was 'always happy to see Mr Witkoff in Moscow' and a meeting with Mr Putin was possible, the spokesman Dmitry Peskov told reporters. He described talks with Mr Witkoff as 'important, substantive and very useful'. Mr Putin said on Friday he was in favour of 'a lasting and stable peace on solid foundations that would satisfy both Russia and Ukraine, and would ensure the security of both countries'. Despite periodically making such statements, Mr Putin has also made clear that Russia's maximalist war goals remain essentially unchanged, demanding as a minimum control over four Ukrainian regions to which Moscow has laid claim, and a commitment that Ukraine will never join Nato. Russia continues to target Ukraine with almost nightly drone and missile attacks. Last week was one of the deadliest for some time in terms of civilian casualties, with one set of attacks on Kyiv killing 31 people, including five children. [ The Irish Times view on Trump and Putin: the dangerous nuclear backdrop Opens in new window ] Both sides continue to target infrastructure in the opposing country with drones. Russia's ministry of defence said on Monday its air defences had intercepted 61 Ukrainian drones overnight. Meanwhile, the Netherlands will contribute €500 million ($579 million) to Ukraine's defence as part of a US initiative, making it the first Nato country to donate funds through the new programme. The Dutch package includes missiles for Patriot surface-to-air interceptor units, Mr Zelenskiy said in a post on X. 'I am sincerely grateful to the Netherlands for their substantial contribution to strengthening Ukraine's air shield,' he said. – Guardian, Bloomberg
The Journal
2 hours ago
- The Journal
Trump threatens to ramp up tariffs on India for its dealing with 'Russian War Machine'
PRESIDENT DONALD TRUMP threatened today to 'substantially' hike US tariffs on goods from India over its purchases of Russian oil – a key source of revenue for Moscow's war on Ukraine. Trump's heightened pressure on India comes after he signalled fresh sanctions on Moscow if Russia did not make progress by Friday towards a peace deal with Ukraine, more than three years since Russia's full-scale invasion. Moscow is anticipating talks with the US leader's special envoy Steve Witkoff, who is expected to meet President Vladimir Putin this week. Today, Trump said in a post to his Truth Social platform that India was 'buying massive amounts of Russian Oil' and selling it for 'big profits.' 'They don't care how many people in Ukraine are being killed by the Russian War Machine,' Trump added. 'Because of this, I will be substantially raising the Tariff paid by India to the USA.' But he did not provide details on what tariff level he had in mind. Advertisement For now, an existing 10 percent US tariff on Indian products is expected to rise to 25 percent come Thursday. Today's threats against India come after Trump last week ordered the deployment of two nuclear submarines in response to what he called 'provocative' comments from Russia's ex-president. Russia, in its first comments on the deployment, today urged 'caution'. 'Russia is very attentive to the topic of nuclear non-proliferation. And we believe that everyone should be very, very cautious with nuclear rhetoric,' the Kremlin's Peskov said. The chief of staff to Zelenskyy today backed Trump's actions. 'The concept of peace through strength works,' Andriy Yermak wrote on social media. 'The moment American nuclear submarines appeared, one Russian drunk — who had just been threatening nuclear war on X – suddenly went silent,' he added. Trump has previously threatened that new measures could mean 'secondary tariffs' targeting Russia's remaining trade partners, such as China and India. This would further stifle Russia, but would risk significant international disruption. - © AFP 2025
Irish Examiner
4 hours ago
- Irish Examiner
EU formally suspends countermeasures to US tariffs for six months
The European Union will suspend its two packages of countermeasures to US tariffs for six months following the deal made with US president Donald Trump, a Commission spokesperson said confirmed on Monday. The EU-US agreement leaves many questions open, including tariff rates on spirits like Irish whiskey, and Mr Trump's executive order last week setting tariffs on most EU goods at 15% did not include carve-outs such as for cars and car parts. EU officials have said they expect more executive orders to follow soon. "The EU continues to work with the US to finalise a Joint Statement, as agreed on 27 July," the spokesperson said in a statement. "With these objectives in mind, the Commission will take the necessary steps to suspend by six months the EU's countermeasures against the US, which were due to enter into force on August 7." The retaliatory tariffs were in two parts: one in response to US steel and aluminium duties, and the other to Trump's baseline and car tariffs. Meanwhile the Swiss government is ready to make a "more attractive offer" in trade talks with Washington, the cabinet said on Monday, after a crisis meeting aimed at averting a 39% tariff on Swiss imports that could hammer the export-driven economy. The Federal Council it was determined to pursue discussions with the United States, if necessary beyond the August 7 deadline that Mr Trump has set for the tariff to come into effect. "Switzerland enters this new phase ready to present a more attractive offer, taking US concerns into account and seeking to ease the current tariff situation," it said in a statement. The statement did not give any details on what the Swiss government may offer. Switzerland was left stunned on Friday after Mr Trump hit the country with one of the highest tariffs in his global trade reset, with industry associations warning that tens of thousands of jobs were at risk. The duties are scheduled to go into effect on Thursday, giving the country, which counts the US as its top export market for pharmaceuticals, watches, machinery, and chocolates, a small window to strike a better deal. The White House said on Friday it had made the move because of what it called Switzerland's refusal to make "meaningful concessions" by dropping trade barriers, calling the two nations' current trade relationship "one-sided". Swiss industry leaders and politicians, however, have struggled to understand why the country was singled out. Mr Trump has stated that he is seeking to rebalance global trade, claiming that current trade relations are stacked against the United States. And Switzerland had a €41bn trade surplus with the US last year. But Swiss president Karin Keller-Suttersaid on Friday Switzerland had given US goods virtually duty-free access to its market, and Swiss companies had made very important direct investments in the United States. "The president (Trump) is really focused on the trade deficit, because he thinks that this is a loss for the United States," she told Reuters. The new tariff rate - up from an originally proposed 31% tariff that Swiss officials had already described as "incomprehensible" - would deal a major blow to Switzerland's export-focused economy, with economists warning prolonged disruptions could shrink Swiss GDP by more than 1%. The tariffs could also see the Swiss National Bank cut interest rates in September, according to Nomura. An index of Swiss blue-chip stocks briefly hit its lowest since mid-April, as shares in banks, luxury retailers and pharma companies tumbled. The SMI index was last down 0.6% on the day, compared with a 0.6% rise in the regional STOXX 600 index. In Zurich, shares in high-end watchmakers such as Richemont and Swatch fell in volatile trading. Reuters
