Iconic sportswear and footwear giant Adidas said Tuesday that the price of all its products will rise in the U.S. due to President Donald Trump’s tariffs.
“Since we currently cannot produce almost any of our products in the U.S., these higher tariffs will eventually cause higher costs for all our products for the U.S. market,” CEO Bjørn Gulden said in a statement on the German company’s first quarter results released April 29.
The brand, best known for sneakers like the Adidas Sambas and Ultraboosts, sources and manufactures many of its products and product components from countries like China, Vietnam, Indonesia, India and Cambodia. China is currently still saddled with a 145% import tariff, and the others were slated for tariffs ranging from 26% to 49% before Trump’s 90-day pause initiated on April 9.
In the meantime, the blanket 10% levied against most countries still has an impact on business, Gulden said.
“Although we had already reduced the China exports to the U.S. to a minimum, we are somewhat exposed to those currently very high tariffs. What is even worse for us is the general increase in U.S. tariffs from all other countries of origin,” he said in the April 29 statement. “Cost increases due to higher tariffs will eventually cause price increases.”
Gulden said the company would not be sharing a year-ahead profit outlook due to the volatility of the current market, despite a “great” quarter.
In the U.S., sales were up just 3% in the first three months of the year, when including the winddown of the sale of Yeezys due to the brand’s terminated partnership with Kanye West. That number went up to 13% when excluding the Yeezy line.
Sales were also up 26% in Latin America, 14% in Europe, and 13% in China, Japan, and South Korea, said the quarterly review. Net sales climbed 12.7% while operating margins rose 3.8 points to 9.9%, bringing the company’s total operating profit to 610 million Euros ($695 million USD) in the first quarter. That’s an 82% increase.
Gulden said that despite the overall positive picture, it’s currently “impossible” to quantify or conclude what impact tariff uncertainty will have on consumers.
“In a ‘normal world’ with this strong quarter, the strong order book and in general a very positive attitude towards Adidas, we would have increased our outlook for the full year both for revenues and operating profit,” Gulden said. “Given the uncertainty around the negotiations between the U.S. and the different exporting countries, we do not know what the final tariffs will be.”