Adidas Faces Cost Pressures and Tariff Headwinds in Q2 2025 Earnings

Introduction Adidas has reported its second-quarter results for 2025, revealing solid overall performance but also raising concerns over rising costs and geopolitical challenges. While the global footwear and apparel giant showed resilience in its core markets, the report highlighted the financial strain imposed by U.S. tariffs and increasing operational expenses. The company is now preparing for a more cautious second half of the year amid volatile global conditions.

Key Takeaways

• Adidas recorded strong Q2 sales despite tariff-related pressure

• Rising costs from supply chains and raw materials affected margins

• Tariffs on Chinese goods impacted Adidas' pricing strategy

• The company warned of possible cost hikes in H2 2025

Adidas Reports Strong Sales but Tight Margins

Adidas posted better-than-expected revenue figures for Q2 2025, driven by steady demand across Europe and North America. Sales in running, training, and lifestyle categories continued to perform well, helping the brand maintain competitive momentum. However, despite topline growth, the company saw its gross margin narrow due to increased input costs and freight expenses.

Executives noted that while consumer demand held strong, inflationary pressures and tariffs on Chinese imports, including sportswear components, have raised logistical and production costs. Adidas had to absorb some of these costs to remain competitive, resulting in reduced profitability.

U.S. Tariffs Complicate Supply Chain and Forecasts

A key factor weighing on Adidas’ Q2 results was the growing impact of U.S. tariffs on Chinese-manufactured goods. These tariffs, part of ongoing trade tensions, have increased sourcing costs and introduced new uncertainties into Adidas’ global supply chain planning.

Company officials explained that while Adidas has diversified some production away from China in recent years, it still relies heavily on Chinese suppliers for both raw materials and finished products. As a result, the latest round of tariffs has directly increased the cost of goods sold for its U.S. business.

Adidas Warns of More Headwinds Ahead

Looking to the second half of 2025, Adidas cautioned investors about persistent cost increases and foreign exchange volatility. The company flagged potential challenges tied to material costs, labor rates, and shipping delays, especially if geopolitical risks escalate further.

Despite these concerns, Adidas reaffirmed its commitment to long-term growth, stating it will continue to invest in brand marketing and product innovation. The company remains focused on strategic expansion in emerging markets and improving its digital retail experience to counterbalance macroeconomic headwinds.

Conclusion Adidas’ Q2 2025 earnings reflect a company navigating a complex global landscape. While sales remain strong, growing cost pressures and trade-related challenges are testing its margins. The brand's ability to adapt its supply chain, pricing, and product strategy will be critical as it enters a more uncertain second half of the year.