Adidas is taking a wait-and-see approach when it comes to tariffs and price increases in the U.S. \u2014 and focusing on its strength outside of America. <\/p>\n
Meanwhile, the German athletic brand is focusing on the other 80 percent of its business that is outside of the U.S. It also has rerouted China-manufactured goods originally bound for the U.S. to other markets. Moreover, the three percent of its sourcing in China for the U.S. market will be taken down to zero.<\/p>\n
Those are the key points in connection with tariffs noted by Adidas CEO Bj\u00f8rn Gulden Tuesday during the company\u2019s first quarter earnings call. <\/p>\n
U.S. President Donald J. Trump on April 2 unveiled a reciprocal tariff plan that saw duties skyrocket across most countries. That was followed by a higher duty rate as high as 145 percent for most China goods headed to the U.S., and days later a 90-day pause<\/a> on implementation of the new duty rates, with the exception of China.<\/p>\n At Adidas, sourcing in China for the U.S. market was 3 percent, with plans for that to go down to zero. The balance is one-third each in Vietnam and Indonesia, with the remaining one-third spread among other markets. <\/p>\n He said he doesn\u2019t know what the end result will be for tariffs, whether they stay at current at-pause levels or if they go up. <\/p>\n \u201cSo we do expect that people will start to raise prices should these duties or all the duties be confirmed, and that\u2019s what we follow. We are then in a reactive mode and not in an active mode,\u201d Gulden said.<\/p>\n The CEO said it only has 20 percent of its business in the U.S., and therefore it doesn\u2019t need to be the leader in pricing but can wait to react based on what\u2019s happening in the market. \u201cOur strategy will [be] not to go as the first mover on price, but we\u2019ll actually look at the other brands, especially the American brands, and then follow,\u201d Gulden said.<\/p>\n He said the company is focusing on the 80 percent of the business that\u2019s outside the U.S. One important factor has been the focus on local execution. <\/p>\n \u201cThe world has become more local, and that\u2019s why we have put a lot of energy in talking to the consumer locally,\u201d he said, explaining that the focus in on giving to the consumer what is \u201clocally relevant.\u201d<\/p>\n The CEO said it has been able to create \u201cbrand heat\u201d in its different markets through updates on product lines, new materials, limited editions and collaborations. He said the animal print is \u201cdoing extremely well\u201d in its lifestyle offerings, while another trend that is growing is the low profile category<\/a>. The Bad Bunny Ballerina sneaker<\/a> <\/a>was recently introduced, with Gulden adding that the Puerto Rican rapper and singer is \u201cour hero in the Latino countries.\u201d<\/p>\n \u201cHe is helping us selling a lot of different products\u2026[W]e have talked about low profile for a long time, and we now see it also moving into the male consumer,\u201d Gulden said. The low profile trend is expected to last for at least two or three seasons. <\/p>\n Elsewhere in footwear, running continues to gain momentum, while basketball continues to be important, particularly in the U.S. market. \u201cThe Women\u2019s World Cup in England will be a launch for us on women\u2019s specific rugby cleats,\u201d the CEO said, adding that in football, the World Cup in the U.S., Canada and Mexico in Summer 2026 will also help showcase its soccer offerings. <\/p>\n For its apparel business, Gulden said the demand right now is \u201cmuch, much bigger from our retail partners than it was only three-to-six months ago.\u201d<\/p>\n For the first quarter <\/a>ended March 31, net income was 428 million euros, up from 170 million euros in the same year-ago period. Operating profit grew to 610 million euros from 336 million euros. Net sales rose 12.7 percent to 6.15 billion euros from 5.46 billion euros a year ago. <\/p>\n The company confirmed its full year-outlook, with sales estimated to grow in the high single-digit in 2025 and operating profit between 1.7 billion and 1.8 billion euros. <\/p>\n The company warned that there could be some negative impact on the U.S. consumer should tariffs go even higher, but only issued the warning because it doesn\u2019t know what the end result will be.<\/p>\n \u201cWe confirm the things that we know. We believe that we can currently gain more momentum in the other markets,\u201d he said. \u201cAnd remember, U.S. is about 20 percent of our business. So we can kind of finance the losses that we\u2019re doing on margin in the U.S. by [growing] in the other markets.\u201d<\/p>\n Separately, the Conference Board on Tuesday said its Consumer Confidence Index fell by 7.9 points in April to 86.0, representing a decline for the fifth consecutive month. The Present Situation Index slipped by just 0.9 points to 133.5, but the Expectations Index dropped 12.5 points to 54.4, the lowest level since October 2011 and below the threshold of 80 that typically signals a recession ahead. <\/p>\n The Conference Board\u2019s senior economist for global indicators Stephanie Guichard said write-in responses indicate that tariffs are now topmost of consumers\u2019 minds. \u201cConsumers explicitly mentioned concerns about tariffs\u2019 increasing prices and having negative impacts on the economy,\u201d the Conference Board said.<\/p>\n And Skechers, which on Thursday posted its first quarter results, saw its management team during its conference call state that it is looking at its COVID playbook for some guidance on how to navigate the tariff backdrop. And while selective price increases are an option, management for the casual footwear brand made it clear that it didn\u2019t want to raise prices solely due to an increase in tariffs, noting a willingness to sacrifice<\/a> gross margin percent to maintain the brand\u2019s value proposition. <\/p>\n","protected":false},"excerpt":{"rendered":" Adidas is taking a wait-and-see approach when it comes to tariffs and price increases in the U.S. \u2014 and focusing on its strength outside of America. Meanwhile, the German athletic brand is focusing on the other 80 percent of its business that is outside of the U.S. It also has rerouted China-manufactured goods originally bound…<\/p>\n","protected":false},"author":1,"featured_media":491,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[14],"tags":[],"_links":{"self":[{"href":"https:\/\/metalroofingintallahassee.com\/index.php\/wp-json\/wp\/v2\/posts\/489"}],"collection":[{"href":"https:\/\/metalroofingintallahassee.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/metalroofingintallahassee.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/metalroofingintallahassee.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/metalroofingintallahassee.com\/index.php\/wp-json\/wp\/v2\/comments?post=489"}],"version-history":[{"count":1,"href":"https:\/\/metalroofingintallahassee.com\/index.php\/wp-json\/wp\/v2\/posts\/489\/revisions"}],"predecessor-version":[{"id":490,"href":"https:\/\/metalroofingintallahassee.com\/index.php\/wp-json\/wp\/v2\/posts\/489\/revisions\/490"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/metalroofingintallahassee.com\/index.php\/wp-json\/wp\/v2\/media\/491"}],"wp:attachment":[{"href":"https:\/\/metalroofingintallahassee.com\/index.php\/wp-json\/wp\/v2\/media?parent=489"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/metalroofingintallahassee.com\/index.php\/wp-json\/wp\/v2\/categories?post=489"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/metalroofingintallahassee.com\/index.php\/wp-json\/wp\/v2\/tags?post=489"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}