Adidas presents the invoice. The German sports equipment manufacturer on Wednesday quantified the expected impact of customs duties imposed by Donald Trump on its annual profitability, although it was evasive about its indirect effects on the important US market.
Customs duties will cause “a cost of around 120 million euros throughout the year” in terms of operating profit (EBIT), “with a significant impact in the fourth quarter,” said the group’s chairman of the board of directors, Bjorn Gulden, during a conference call.
The manager was speaking on the occasion of the publication of the group’s final results for the third quarter, which recorded the group’s share of net profit that increased by 4% year-on-year, to 463 million euros.
Adidas began to react to the additional customs costs by increasing the prices of its products, particularly footwear, on the foreign market.
Sales of the Adidas group fell 5% in North America in the third quarter, to 1.3 billion euros, penalized by US customs duties but also by the discontinuation last year of the very popular sneaker line of the controversial rapper Yeezy.
At constant exchange rates, which better reflects the company’s intrinsic performance, sales in the United States increased 8% year-over-year from July to September.
However, this is slower than the progression in Europe (12%) and China (+10%), its other key markets.
Adidas is investing in American sports, particularly in universities, to try to compete with its great local rival Nike.
In early October, Adidas, despite the impact of customs duties, raised its annual operating profit forecast to €2 billion this year, up from a range of between €1.7 billion and €1.8 billion previously forecast, at the end of an excellent third quarter.
Source: BFM TV
