Adidas Shares Drop After Lower-Than-Expected Q2 Sales and Tariff-Related Uncertainty

Key Takeaways:

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1. Sales Miss: Adidas reported Q2 sales of €5.95 billion, up 2.2% year-over-year but below analyst expectations of €6.15 billion.
2. Profit Growth: Net profit rose to €369 million from €190 million, and operating profit increased nearly 58% to €546 million.
3. Guidance Confirmed with Caution: Adidas maintained its 2025 operating profit guidance of €1.7-1.8 billion and targets high-single-digit currency-neutral sales growth but expressed caution due to global volatility.
4. Tariff Impact: The company expects U.S. tariffs to increase costs by up to €200 million for the remainder of the year.
5. Stock Performance: Shares fell 8.9% in early European trading and are down 24% year-to-date.

What Happened?

Adidas posted second-quarter results showing modest sales growth but below market expectations, weighed down by ongoing uncertainty around U.S. tariffs. Despite strong profit gains, the company’s cautious outlook reflects concerns about the impact of trade levies and global market volatility.

CEO Bjorn Gulden noted that while the year started well, the unpredictable environment tempers optimism for the full year. The tariff-related cost increase is a significant headwind for Adidas’s U.S. business.

Why It Matters?

Adidas’s results highlight the challenges global companies face amid trade tensions and tariff uncertainties, which can erode margins and complicate forecasting. The cautious guidance despite profit growth signals that tariffs and geopolitical risks remain key risks for multinational retailers.

The stock’s sharp decline reflects investor concerns about these headwinds and the company’s ability to sustain growth in a volatile environment.

What’s Next?

Watch for updates on how Adidas manages tariff-related costs and adjusts pricing or supply chains to mitigate impacts. Monitor broader trade developments and their influence on multinational consumer goods companies.

Investors should also track Adidas’s sales momentum and margin trends in key markets, especially the U.S., as well as any strategic responses to evolving trade policies.