Companies

adidas reports strong first quarter but CEO warns of tariff impact ahead

Apr 30, 2025 Germany

The German sportswear company has reported a 13% increase in sales in the first quarter, as compared to the same period last year. However, CEO Bjørn Gulden warned of the impact of tariffs ahead

“I am very proud of what our team achieved in Q1. Double-digit growth across all markets and channels in today’s volatile environment shows the strength of our brand and underlines the great job our people are doing. The operating profit of € 610 million and the 9.9% operating margin prove the great potential of our company. A great quarter!”, said the CEO Bjørn Gulden.

First Quarter Results

In the first quarter of the financial year 2025, adidas’ revenue increased by 13% on a currency-neutral basis and in euro terms, reaching 6.15 billion euros, on a comparable basis to the same period last year. “The double-digit growth reflects the strong momentum of the adidas brand, which increased 17%”, pointed out the company.

From a regional perspective, in this period, currency-neutral net sales grew at double-digit rates in Latin America (up by 26% year-on-year), Emerging Markets (up by 23% year-on-year), Europe (up by 14% year-on-year), Greater China (up by 13% year-on-year) and Japan/South Korea (up by year-on-year 13%). In North America, net sales rose by 3%, with underlying growth of 13% when excluding last year’s Yeezy sales.

In the three months that ended in March, adidas’ gross margin improved by 0.9 percentage points to 52.1%, as compared to the same period of the prior year, mainly due to lower product and freight costs as well as reduced discounting.

The company’s first quarter operating income rose by 82% year-on-year to 610 million euros, reflecting an operating margin increase of 3.8 percentage points to 9.9%. Net income from continuing operations more than doubled to 436 million euros from 171 million euros in the same period of 2023, resulting in basic and diluted earnings per share from continuing operations of 2.44 euros.

The sportswear company also reported a 15% increase in inventories to 5.07 billion euros at the end of the period, both in reported and currency-neutral terms, “reflecting a healthy position to support continued double-digit top-line growth for the adidas brand”.

Full Year Outlook

adidas has reaffirmed its full year outlook, taking into account the upside potential from better-than-expected first quarter results and the downside risk from increased uncertainty around the potential direct and indirect impact of higher US tariffs.

“Although we had already reduced the China exports to the US to a minimum, we are somewhat exposed to those currently very high tariffs. What is even worse for us is the general increase in US tariffs from all other countries of origin. Since we currently cannot produce almost any of our products in the US, these higher tariffs will eventually cause higher costs for all our products for the US market. Given the uncertainty around the negotiations between the US and the different exporting countries, we do not know what the final tariffs will be”, explained Gulden.

While it is not possible to quantify the impact of cost increases on consumer demand, the company currently expects currency-neutral sales to grow at a high single-digit rate and operating profit to increase to a level between 1.7 and 1.8 billion euros in 2025.

Image Credits: report.adidas-group.com

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