MARKET INSIDER – Adidas has just reported one of its strongest quarters ever — but behind the record-breaking numbers lies a troubling paradox: the German sportswear giant is losing momentum in one of its most crucial markets, North America.
The company’s third-quarter revenue surged 12% year-on-year to €6.63 billion ($7.73 billion), while operating profit jumped 23% to €736 million. The impressive results prompted Adidas to raise its full-year earnings forecast for 2025.
Yet the global success story is shadowed by a regional slowdown. Despite booming growth in Asia-Pacific and Latin America — where sales rose between 10% and 21% — North America has emerged as the company’s weakest link.
Even after stripping out currency effects, Adidas’ sales in the region grew just 8%, and when factoring in the loss of its lucrative Yeezy line following the fallout with Kanye West, revenue actually fell 5% year-on-year.
Tariffs Take a Toll
A key culprit behind the slowdown: U.S. import tariffs on goods produced in Asian manufacturing hubs like China and Vietnam — where Adidas sources much of its production.
The increased duties have driven up manufacturing and logistics costs, forcing Adidas into a tough decision: absorb the hit to margins or pass the cost on to consumers. It chose the latter.
For instance, its iconic Samba sneakers — once priced at $90 — now retail for $100 on the U.S. website. While seemingly minor, this move signals a broader pricing shift that could test brand loyalty in a cautious consumer market.
CEO Bjorn Gulden acknowledged the headwinds, noting that “the market remains volatile with rising tariffs in the U.S. and growing uncertainty among both retailers and consumers globally.”
Higher prices may help protect profits but risk weakening demand — especially as inflation pressures households and spending patterns shift toward value-oriented brands.
A Crowded Playing Field
The timing couldn’t be worse. Rivals are regrouping fast. Nike, still the dominant player in the U.S., is undergoing an aggressive restructuring push to reclaim lost market share. Meanwhile, Puma — led by former Adidas executive Arthur Hoeld — is charting a fresh strategic direction.
This intensifying competition leaves Adidas caught in a delicate balancing act: maintaining global momentum while reigniting its North American growth engine.
Looking Ahead: Betting on the Big Stage
Despite the regional setbacks, Gulden remains optimistic. Adidas is now gearing up for a pivotal 2026, when the Winter Olympics and FIFA World Cup — both events where the brand has deep roots — will offer high-visibility opportunities to drive engagement and sales worldwide.
For now, though, the paradox stands: Adidas is sprinting ahead globally but losing pace in the very market that once defined its dominance.
Market Insider Insight:
Adidas’ North American struggles underscore a broader challenge facing global brands — navigating trade tensions, rising costs, and shifting consumer behaviors without losing their competitive edge. How effectively Adidas adapts its pricing, supply chain, and brand strategy in 2026 may determine whether its current winning streak continues or falters.
