Adidas Shares Dive 7% as $231M U.S. Tariff Hit Looms, Price Hikes Targeted by August

Shares of Adidas (OTC: ADDYY) tumbled over 7% on Wednesday after the sportswear giant revealed the impact of U.S. tariffs is hitting its bottom line hard - and warned those import levies will hike prices for American customers.

The German sneaker and apparel maker reported a multi-million euro hit from tariffs in Q2 and expects the toll to climb to around €200 million ($231 million) in the next six months. CEO Bjørn Gulden made it clear price adjustments would be focused solely on the U.S. market, saying, "The price increases, if any, will only be in the U.S."

After plummeting as much as 9% in morning trading, Adidas' shares pulled back a bit but remained down by roughly 7.4% by late morning in London. The company hasn't raised prices yet and is trying to soften the blow by tweaking its supply chain instead. Still, Gulden said he'd reassess pricing around August 1, when the final tariff rates are expected, hinting that new product lines are likelier to face price bumps before existing inventory.

"We will not be the price leaders. We will move slowly and see what is happening in the market," Gulden added, signalling careful market testing rather than a wholesale price hike.

The bigger worry may be demand. Adidas flagged that these tariffs, and the uncertainty they bring, could dampen consumer appetite if inflation picks up in the U.S. "It's about maneuvering through this as best we can without damaging the business long-term," Gulden said. The company also admitted it can't fully predict how sharply tariffs might crimp customer spending.

Despite the tariff turmoil, Adidas stuck to its full-year outlook, forecasting a high-single-digit increase in currency-neutral sales and an operating profit between €1.7 billion and €1.8 billion. However, it cautioned that this could change given ongoing macroeconomic and tariff-related uncertainties.

Looking at the numbers, the second quarter came in weaker than analysts had hoped. Revenue nudged up just 2% year-over-year to €5.95 billion, missing expectations of €6.23 billion, with a €300 million drag from currency fluctuations. Operating profit, on the other hand, beat estimates, rising 58% to €546 million compared to forecasts of €518 million.

U.S. sales growth was the softest spot, underscoring the pressure tariffs might be putting on America's appetite for Adidas gear. All told, the company's navigating choppy waters as price pressures, supply shifts, and inflation fears collide in what's shaping up to be a tricky second half for this sportswear heavyweight.