Adidas AG reported a lower-than-expected full-year profit forecast, citing adverse impacts from global tariffs and unfavorable currency movements. The guidance miss has sparked concerns across consumer discretionary and industrial sectors.
- Adidas revised EBIT forecast down by 15% YoY due to tariffs and FX swings
- Q1 euro-denominated revenue declined 7% amid a 8% euro-to-dollar depreciation
- Tariffs increased input costs by 6% in Q1 across key markets
- ADID.F share price fell 5.3% on the announcement
- XLF dropped 0.9% as investor sentiment turned cautious
- FXE declined 1.8% on heightened currency market volatility
Adidas AG has revised its annual profit outlook downward, signaling a significant setback for the German sportswear giant amid persistent trade barriers and foreign exchange volatility. The company now expects adjusted earnings before interest and taxes (EBIT) to decline by approximately 15% year-over-year, falling short of market expectations. This forecast comes after a 7% drop in euro-denominated revenues during the first quarter, driven by a stronger U.S. dollar and increased tariffs on imports into key markets, including the United States and India. The currency headwinds have had a pronounced effect, with the euro weakening 8% against the U.S. dollar over the past six months. This depreciation directly eroded the value of Adidas's dollar-denominated sales when converted back into euros. Additionally, new tariffs on textile and footwear imports in multiple jurisdictions have increased input costs by an estimated 6% in the first quarter alone. These combined pressures have intensified cost management challenges across the company’s global supply chain. The earnings miss has triggered a negative market reaction, with Adidas shares (ADID.F) dropping 5.3% in early trading. Investors are now reassessing the resilience of multinational consumer discretionary firms exposed to geopolitical trade risks. Financial sector exposure is also impacted, as the broader market index (XLF) dipped 0.9%, reflecting investor caution over global trade stability. Currency-sensitive equities, particularly those tracking the euro (FXE), saw increased volatility, with FXE falling 1.8% on the day. Analysts note that Adidas’s warning may serve as a bellwether for other multinational consumer goods companies facing similar macroeconomic pressures. The company emphasized that its long-term strategy remains intact, but near-term execution is under strain due to external macro factors beyond its control.