Adidas, a global sportswear brand, experienced a 5% dip in sales in North America during the third quarter of the year. This decline was attributed to a weak dollar and uncertainty surrounding President Donald Trump’s tariffs on American consumers. Despite this, Adidas reported a 3% increase in global revenues, reaching a quarterly record of 6.63 billion euros ($7.73 billion).
The company noted that the strong euro negatively impacted sales by 300 million euros. Adjusting for currency fluctuations, sales in North America, the second-largest market for Adidas, saw a modest 1% growth, significantly slower than the overall currency-adjusted figure of 8%.
Adidas CEO, Bjorn Gulden, expressed concerns over the impact of tariffs on American consumers, stating that U.S. retailers were being cautious and ordering less product upfront. He highlighted the uncertainty surrounding price increases and their visibility to consumers.
To mitigate the impact of tariffs, Adidas expects a 120 million euro reduction in operating profit this year, with the largest impact anticipated in the fourth quarter. The company has implemented price hikes and supply chain adjustments to offset some of the losses. Gulden mentioned that price increases were focused on higher-end products, such as the popular Samba sneaker, which saw a price increase from $90 to $100.
In response to the changing market dynamics, Adidas has shifted its sourcing from China to the U.S. to manage higher tariffs effectively. Despite challenges, the company continues to innovate and grow, with a particular focus on the running segment, which saw a 30% increase in the quarter.
Adidas is still recovering from the Yeezy partnership fallout, but Gulden remains optimistic about the brand’s future. He emphasized the continued growth of iconic products like the Samba and the brand’s investment in new sources of growth.
In conclusion, Adidas remains resilient in the face of economic challenges, demonstrating adaptability and innovation to sustain its market position. The company’s strategic approach to pricing, sourcing, and product development sets a strong foundation for future growth and success.
