Adidas sees 120-million-euro Trump tariff hit

[FRANKFURT] German sportswear giant Adidas said Wednesday (Oct 29) that it expected US President Donald Trump’s tariff blitz to cost it 120 million euros (S$180.7 million) for the year.

The tariffs would cost “roughly” that amount, Adidas boss Bjorn Gulden said on an analyst call, adding that “most of the impact” would come in the final months of the year.

Over 90 per cent of Adidas’s output last year was produced in Asia, the company says, meaning firms shipping Adidas products into the United States are subject to hefty import levies.

North America last year accounted for over 20 per cent of Adidas’ sales.

Though the figure of 120 million euros is lower than the 200 million euros Adidas warned of in July, Gulden said it was hard to gauge the “indirect impact” of the tariffs as prices rise.

“We don’t know how the consumer will react in the US when these higher prices come into effect,” he said.

Overall North American sales fell five per cent in the third quarter to 1.3 billion euros, hit by the tariffs and the discontinuation of the Yeezy sneaker line.

The line had been made in collaboration with rapper Ye, formerly known as Kanye West, but was junked after he made antisemitic remarks on social media.

Gulden said that Adidas was investing heavily into US college sports in a bid to catch up with rival and industry leader Nike.

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“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 giving a timeline.

Earlier this month, Adidas raised its full-year core profit forecast to two billion euros, up from a prior range of 1.7 to 1.8 billion euros. AFP