Adidas Holds Back Profit Forecast Amid US Tariff Uncertainty Despite Strong Q1 Performance

Tariffs still at the forefront

Key Highlights:

• Adidas reports strong Q1 growth in Europe and China
• Profit forecast unchanged due to uncertainty over US tariffs
• Company shifts supply chains to avoid tariff impacts
• Running shoe sales boosted by London Marathon wins
• Full-year outlook maintained, but with wider risk margins

Adidas Posts Strong Sales But Pauses Profit Upgrade

German sportswear giant Adidas has opted not to upgrade its 2025 profit outlook despite delivering strong first-quarter results, citing uncertainty surrounding US import tariffs as the key reason for its caution.

Speaking during a press conference, CEO Bjorn Gulden explained that under normal circumstances, the company would have raised its revenue and profit forecasts. However, the unpredictability of US trade policy, especially regarding tariffs, has made it too difficult to plan with confidence.

Mitigating the Tariff Threat

To limit exposure, Adidas acted quickly ahead of tariff deadlines in early April by front-loading shipments through US customs and redirecting goods made in China to other global markets. Gulden noted that while the company has already reduced its exports from China to the US, it remains “somewhat exposed” to future tariff hikes.

The company is also attempting to balance weaker US performance by boosting growth in other regions. "You could ironically say that not being so dependent on the US now is an advantage for us," said Gulden—an indirect nod to competitor Nike’s larger US footprint.

Adidas also addressed the 10% blanket increase in US tariffs, warning that it will likely result in price hikes for consumers, though the exact impact on demand remains uncertain.

Impact on Global Supply Chains

The situation has been further complicated by newly announced tariffs on products from Southeast Asia—particularly Vietnam and Indonesia, key manufacturing hubs for the sportswear industry. These tariffs, though paused until July, have added additional layers of unpredictability.

"We hope and work on the assumption that these higher duties will not come back," Gulden said.

Mixed Regional Performance

Adidas reported solid first-quarter gains in several markets:

• Europe: +14%
• Greater China: +13%
• North America: +3% (impacted by Yeezy product phase-out)

The brand is showing signs of regaining market share in China, and Gulden highlighted Adidas-sponsored athletes winning both the men’s and women’s races at the London Marathon as a testament to its revitalised running shoe range.

Despite this positive momentum, Adidas confirmed that full-year guidance remains unchanged. However, the company warned that the range of possible outcomes had widened and that ongoing uncertainty may pressure results later in the year.

2025 Outlook Still Cautious

For 2025, Adidas forecasts:

• Currency-neutral sales growth of 5–9%
• Operating profit between €1.7 billion and €1.8 billion (£1.46bn–£1.55bn)

While Adidas is maintaining a steady trajectory for now, the broader business environment is forcing it to remain flexible.

Conclusion

Adidas has delivered a strong start to the year, with double-digit sales growth in key markets and a successful boost to its running brand through high-profile athletic wins. However, geopolitical and trade uncertainties, particularly around US tariffs, are forcing the company to hold off on a profit upgrade.

As supply chain pressures mount and competitive threats persist, Adidas’s ability to stay agile—both strategically and operationally—will be critical in navigating what is shaping up to be a turbulent year.

Sources:  (Investing.com, Reuters)