Can Adidas Stock Turn Things Around?

Tariffs have hit clothing companies hard, and Adidas is feeling the pain. Their shares have tanked 21% in 2025 as of September 2, following a truly disappointing Q2 earnings report in July. Yet, the German footwear giant might have a strategy up its sleeve to reverse their fortunes.

Tariff nightmare unfolding

When CEO Bjørn Gulden delivered the quarterly report, he revealed the company took a multi-million-euro hit thanks to Trump’s import tariffs. Looking ahead, Adidas fears tariff-related costs could reach a staggering €200 million ($232 million) for the remainder of 2025 - that’s 3.4% of their Q2 revenue of €5.95 billion. Despite this gloomy outlook, they’re somehow still confident about dominating “all markets except North America.”

Gulden also warned that American consumers should brace for price increases across the board. Though Trump extended some tariff moratoriums with China, others expired after August 1, including those for Vietnam and Indonesia - Adidas’s primary manufacturing hubs after they shifted production away from China over the past decade.

If Trump’s proposed 46% tariff on Vietnamese imports sticks, it won’t just hurt Adidas - Nike and Wayfair will take hits too. July was brutal for the company with an 18% share price drop, their worst month this year. By August 6, the price had fallen to $95.35, the lowest of 2025. At this rate, they’re dangerously close to hitting October 2023 price levels, with investors growing increasingly skittish.

Running shoes as salvation?

Deutsche Bank analyst Adam Cochrane believes running shoes represent the most “exciting category” for market growth. He expects both Adidas and rival Puma to pivot toward this segment given the surging demand for comfort and style. Adidas seems to be following this playbook, having launched two running shoes already this year: the Adizero Adios Pro 4 in January and the Boston 13 in May.

Puma isn’t faring any better, reporting a 2% sales decline in Q2 and lowering their 2025 outlook. Their U.S. stock has been absolutely hammered, down roughly 50% this year.

Hold your horses

With tariffs continuing to squeeze imports into the U.S., investors are watching anxiously to see if Adidas will pass these costs on to consumers. Until there’s clarity on how they’ll manage these increased expenses, making an informed decision about the stock’s long-term value remains difficult. Smart money is waiting for the next earnings report before jumping in.

I’ve personally watched several apparel companies struggle with similar tariff issues, and the outcomes have varied wildly. Some managed to pivot production or absorb costs, while others crashed and burned. Until Adidas shows their hand, this stock remains a risky bet in an increasingly protectionist global economy.