He also flagged widespread discounting, a sign of uncertainty among retailers and consumers.
Adidas’ third-quarter sales, hit by a weak dollar, fell 5% in North America, although even adjusted for the currency impact the second-largest market after Europe was the worst performer.
Shares closed more than 10% lower, the biggest daily drop since late July, despite global sales growing 3% to a quarterly record 6.63 billion euros ($7.73 billion).
“(US) retailers are very careful… So you can clearly see that they want to buy less upfront,” Bjorn Gulden said on a call with journalists, adding that they were also “very flexible” with discounts as they had to clear built-up inventories from other major brands.
Gulden later told investors that the discount trend was hurting full-price Adidas sales. “If you are asking full price for a shoe costing 100 euros and the competitor is asking for 50% for a shoe costing 200 euros, then you will of course sell less.” Ahead of Black Friday, the biggest sales event of the year, Gulden said he didn’t think discounts would be lower than last year.
REDUCING RATE HITCHES WITH PRICE INCREASES AND SUPPLY CHAIN CHANGES
Adidas expects the US tariffs to shave 120 million euros from operating profit this year, with the biggest hit coming in the fourth quarter, Gulden said. That is down from a previous estimate of 200 million euros, after higher prices and changes in the supply chain partially offset the new duties.
Gulden said Adidas has tried not to raise prices on its cheaper shoes and clothing because those customers are more sensitive to price increases. Instead, they choose to raise prices on more expensive items.
For example, Adidas’ popular Samba sneaker now costs $100, compared to $90 previously.
Yet Gulden thinks that the price increases are not yet really visible to many consumers.
Like other sportswear brands, which source everything from tracksuits to sneakers from factories in Asia, Adidas has scaled back its sourcing from China to the US to manage the impact of higher US tariffs.
Meanwhile, a strong euro against the dollar caused a hit of 300 million euros on quarterly turnover. Adjusted for currency effects, North America sales rose 1%, although still significantly slower than Adidas’ overall currency-adjusted figure of 8%.
RECOVERING FROM YEEZY, SAMBA STILL GROWING
“Even though the general consumer is not strong and there is a lot of inventory on the market, Adidas is still managing to grow well,” said Simon Jaeger, portfolio manager at Flossbach von Storch in Cologne.
Adidas is still recovering from the Yeezy affair after ending its highly profitable partnership with the brand’s designer – the rapper Ye, formerly known as Kanye West – over his anti-Semitic rants.
The loss of the line left the company at an annual loss in 2023.
Under Gulden, Adidas’ post-Yeezy growth was fueled by multicolored retro “terrace” sneakers like the Samba and Gazelle.
“Samba is still growing. I know people say it’s over, but it’s not,” Gulden said.
But Adidas has been looking for new sources of growth as that trend reverses, such as the running segment, which grew 30% in the quarter, improving from 25% growth in the second quarter.
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