Tariffs have affected clothing companies globally, and Adidas (ADDYY +0.09%) is no different. Its shares have dropped by 21% in 2025 as of market close Sept. 2, and after a disappointing second-quarter earnings report on July 30. However, the German shoemaker could have a plan to turn things around.
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Tariff impacts being felt
In its July 30 quarterly report, Adidas CEO Bjørn Gulden shared that the company suffered a multimillion-euro hit in the second quarter due to recent U.S. tariffs on imports implemented by President Donald Trump. The sportswear company fears it could face tariff-related costs of up to 200 million euros ($232 million) over the remainder of 2025, equivalent to 3.4% of its 5.95 billion euros ($6.9 billion) in Q2 revenue. Still, Adidas is optimistic that it will be "a leader in all markets" except North America.
Gulden also warned that consumer goods prices overall may increase in the U.S. because of tariffs. Even though Trump extended tariff moratoriums with China, other pauses expired after Aug. 1, including those for Vietnam and Indonesia, the two countries that supply Adidas the bulk of its goods.
Ironically, China was once the brand's leading manufacturer before it began pivoting to Vietnam within the last decade. If Trump's proposed 46% tariff on goods imported from Vietnam remains in effect, it could have a big impact on Adidas, as well as the businesses of other clothing companies that source their products from the country, which include Nike and Wayfair.
OTC: ADDYY
Key Data Points
The company faced an 18% drop in share price in July, its worst-performing month this year. Following that, its price fell to $95.35 on Aug. 6, the lowest price of 2025. At this pace, Adidas is in danger of reaching its lowest price since October 2023 as there is uncertainty among investors and the apparel company itself due to tariff and sales concerns.
Will running shoes save Adidas' stock?
Adam Cochrane, an analyst at Deutsche Bank AG, recently described running shoes as the most "exciting category" of footwear for market growth. He expects Adidas and fellow German sportswear brand Puma to redirect focus toward this category due to the increasingly high demand, as they offer comfort and style. Adidas has already matched those predictions, having released two running shoes this year: the Adizero Adios Pro 4 in January and the Adidas Boston 13 in May.
Like Adidas, Puma has suffered serious losses this year. It reported a 2% decrease in sales in its Q2 earnings report on July 31. It also lowered its outlook for the rest of 2025 compared to its Q1 prediction. U.S. stock prices for the brand have plummeted by roughly 50% this year.
Waiting to see
With tariffs likely to continue pressuring imports to the United States, investors will be watching to see if Adidas raises prices for consumers. Once investors understand how Adidas plans to manage the increased cost of doing business in the United States, they'll be able to make a more informed decision about the stock's long-term value within their portfolio. But for now, investors should wait for the next earnings report before purchasing shares.
