Adidas Charts a Course Through Tariff Turbulence and Expansion

Investors in Adidas are navigating a complex landscape where robust operational performance collides with significant external headwinds. The German sportswear giant is simultaneously expanding its footprint in key growth markets while bracing for a substantial financial impact from new US trade policies.

The company recently announced a strategic partnership with Saudi Arabian airline Saudia, launching an exclusive “Made to Fly” package that combines sportswear with travel services. This move is seen as an effort to deepen brand loyalty in emerging markets, following similar initiatives in Shanghai to broaden global distribution channels for its apparel technologies. Despite this strategic expansion, the market reaction was muted, with shares slipping to 143.00 euros in Frankfurt mid-week, extending the stock’s year-to-date decline to approximately 15 percent.

This weak trading trend persists as the share price struggles to break above its short-term moving average. The annual low of 130.60 euros, marked in early April, is back in focus as a key support level. Notably, this recent price weakness attracted insider buying. When the stock hit that low, the investment vehicle of major shareholder Nassef Sawiris acquired shares worth eleven million euros, and CFO Harm Ohlmeyer made a six-figure personal investment.

Should investors sell immediately? Or is it worth buying Adidas?

The fundamental business, however, tells a story of recovery. For the full year 2025, Adidas generated revenue of nearly 25 billion euros and significantly increased its net profit. The challenge lies ahead. A surprising US Supreme Court ruling in February 2026 ended certain IEEPA fees but instituted a blanket 10 percent import levy on almost all importing countries. Concurrent US investigations into Vietnam for potential unfair trade practices add another layer of complexity, directly impacting Adidas’s supply chain where about 40 percent of total shoe production originates.

CFO Harm Ohlmeyer estimates the combined burden from these tariffs and a weak US dollar at around 400 million euros for the year. This headwind has forced a revision of strategic targets; without it, the company could have achieved its goal of a 10 percent operating margin. Management now expects an operating profit of approximately 2.3 billion euros for the current year, below the 2.72 billion euros analysts had hoped for—a gap that triggered a sharp sell-off when announced in March.

All eyes are now on the upcoming quarterly report due April 29, which will provide the first concrete data on how the company is managing these new costs. Analysts anticipate first-quarter revenue of 6.33 billion euros, representing double-digit percentage growth. Shortly after, on May 7, the Annual General Meeting will be a key event for shareholders. The board will propose an increased dividend of 2.80 euros per share and seek approval for a substantial share buyback program. CEO Bjørn Gulden, whose contract was recently extended early until the end of 2030, is taking a cautious approach to US price increases, preferring to monitor competitors rather than lead the market.