Seoul Gazette - Adidas hikes profit forecast as contains US tariff impact

The maker of the popular Samba and Gazelle trainers now expects an operating profit of around two billion euros ($2.3 billion) this year, up from its previous forecast of 1.7 to 1.8 billion euros.

"The improved profitability outlook reflects continued brand momentum, the better-than-expected business performance as well as the company's successful efforts to partly mitigate the additional costs resulting from increased US tariffs," Adidas said in a statement.

The company, second only to Nike among global sportswear companies in terms of sales, also predicted revenue would rise by around nine percent when currency changes are stripped out, higher than previously expected.

Adidas had warned in July that US tariffs could cost it an extra 200 million euros this year, and that rising prices could force consumers to cut back on purchases.

Adidas is particularly exposed to the trade tensions sparked by Trump's tariffs barrage as it has a sprawling global supply chain and makes its products in countries that faced hefty US levies, including Vietnam and Indonesia.

Both countries reached deals in July to lower the rates the Trump administration planned to impose, but their products still face sharply higher levies than previously.

"The environment is volatile with the tariff increases in the US and a lot of uncertainty among both retailers and consumers around the world, but our teams work hard, and our brand and our products resonate well with consumers," Adidas chief executive Bjorn Gulden said in the statement.

He praised the company's teams for achieving record revenue in the third quarter.

"Twelve percent growth for the Adidas brand leading to total revenue of 6.63 billion euros is the highest we have ever achieved as a company in a quarter," Gulden said.

Adidas is only this year fully recovering from the effects of its split with the American rapper Ye after outrage over his antisemitic comments.

The halt of sales of the popular Yeezy trainers pushed Adidas into loss in 2023.

G.Cho--SG