Despite good first-quarter results, German sportswear company Adidas is holding back on raising 2025 financial expectations, citing the uncertainty around US import tariffs as a reason for the difficulty in planning and forecasting.
Following last week's quarterly results, CEO Bjorn Gulden states that "in a normal world" the company would have increased its revenue and profit guidance, but tariff uncertainty kept it from doing so.
Adidas anticipates that all of its products will eventually see price rises due to the general increase in US tariffs, but it stated that it is presently impossible to quantify these or determine the anticipated impact on US customer demand, underscoring the paralysis brought on by trade uncertainty.
"Given the uncertainty around the negotiations between the US and the different exporting countries, we do not know what the final tariffs will be. Therefore, we cannot make any 'final' decisions on what to do," Gulden said.
Earlier, Adidas minimized its exports of Chinese-made items to the US, however, Gulden claims that the company is still "somewhat exposed" to significantly higher US tariffs on Chinese goods, though it is uncertain how long those duties may stay in place.
Sportswear companies who manufacture the majority of their footwear and apparel in Southeast Asia were caught off guard by the unexpectedly high US tariffs on nations like Vietnam and Indonesia, which were announced at the beginning of this month but then postponed until July.
Adidas stated that it will work to guarantee that its US retail partners and customers receive products "at the best possible price" as tariffs increase the cost of doing business. It also stated that it would attempt to make up for the uncertainties in the U.S. by improving its performance in the rest of the globe.
Sales in the first quarter increased by 26 percent in Latin America, 14 percent in Europe, and 13 percent in Greater China. Adidas said that the phase-out of its Yeezy footwear line was the reason for the mere three percent increase in sales in North America.
Adidas stated that the range of potential outcomes was now broader and that uncertainty could negatively impact company earnings later in the year, while adhering to its full-year forecast.
Adidas projects that its operating profit will reach between 1.7 billion and 1.8 billion euros in 2025, while currency-neutral sales will grow at a "high-single-digit" rate (between five percent and nine percent).
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As it attempts to better compete against younger brands like On and Hoka that have gained popularity at the expense of Nike, Adidas, and Puma, Adidas reported an improvement in sales of running shoes and apparel in the first quarter.