Adidas Faces Supply Chain Quandary as Tariffs Bite
Published on 04/06/2026 at 04:22 | Redaktion boerse-global.de
The strategic pivot to Vietnam, once a solution to earlier trade tensions, has now become a significant vulnerability for sportswear giant Adidas. Approximately 27% of the company's global procurement volume originates from Vietnam, a nation now subject to a substantial 46% punitive tariff from Washington.
A Network Entangled
The scale of Adidas's operations in the region underscores the challenge. The company relies on 70 supplier facilities in Vietnam, representing nearly one-fifth of its total production base. Shifting this capacity quickly is not a viable option, as nearby alternative manufacturing hubs are also caught in the tariff web. Indonesia, which accounts for 19% of Adidas's procurement, faces a 32% duty. India is subject to 26%, and Cambodia confronts a steep 49% tariff.
Industry analysts highlight the structural hurdles. According to Bloomberg analyst Poonam Goyal, manufacturing performance footwear requires highly specialized capabilities that cannot be relocated in a matter of months. In the near term, price increases appear the most probable response, though many retail agreements have already been locked in. Any resulting adjustments for consumers are unlikely to be felt for at least six months.
Should investors sell immediately? Or is it worth buying Adidas?
Adidas, alongside Nike and other brands, has petitioned the U.S. President for an industry-wide exemption. The Footwear Distributors & Retailers of America trade group has labeled the reciprocal tariffs an "existential threat" to the American shoe industry.
Financial Targets Adjusted
The financial implications are already materializing. Adidas is targeting an operating profit of around €2.3 billion for 2026. This falls roughly 15% short of the average analyst consensus forecast of €2.72 billion. CFO Harm Ohlmeyer noted that, absent the tariff burdens and a weak U.S. dollar, the company would have achieved a 10% EBIT margin this year. That specific profitability goal has now been deferred to the 2027/2028 timeframe.
Despite these headwinds, analyst sentiment remains predominantly positive. A significant majority, 22 out of 23 covering analysts, currently recommend buying the shares. UBS recently reaffirmed its "Buy" rating with a price target of €219, anticipating that the quarterly report due on April 29 will demonstrate a solid start to the year. Kepler Capital echoed this supportive stance. The prevailing view among experts is that the recent share price decline—which has left the stock trading approximately 55% below the analyst consensus target of €204.50—is an overreaction.
The upcoming report on April 29 is expected to provide the first concrete data on the extent to which tariffs and currency effects are pressuring gross margins. Investors will also scrutinize growth in Adidas's direct-to-consumer sales channel, an area the company is increasingly positioning as a buffer against such external shocks.
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