North American Market Under Pressure

In the third quarter, Adidas’ North America business expanded modestly by 8% compared with the prior year when excluding contributions from the Yeezy line. Including the discontinued segment, revenues in the region declined roughly 5%, underscoring the impact of prior-year base effects and the absence of a previously strong product line.

While the brand maintained overall global momentum, with group-wide currency-neutral growth of 12%, North America stands out as a relative weakness. The company attributes part of this slowdown to increased tariffs on imports from key sourcing countries, which have raised costs and pressured margins. In response, Adidas has implemented price increases on select products and adjusted sourcing strategies to mitigate cost pressures.

Strategic Implications and Market Dynamics

Adidas’ performance in North America highlights broader challenges in the global apparel and footwear sector. Supply-chain disruptions and tariffs are forcing brands to balance price increases, margin protection, and consumer demand. U.S. consumers, facing higher costs, may exhibit more cautious spending behavior, particularly in price-sensitive lifestyle categories.

The North American slowdown presents a dual challenge for Adidas: sustaining growth while protecting profitability. The company’s strong performance in other regions, where growth remains in double digits, offers some buffer, but prolonged weakness in the U.S. could affect brand momentum and investor confidence.

Risks and Outlook

Key risks include the potential for tariffs and rising costs to erode margins if price increases are resisted by consumers. Any further softness in demand or additional trade frictions could delay recovery in North America. On the other hand, Adidas’ ability to optimize its supply chain, raise prices strategically, and leverage growth in other regions may help offset regional weakness.

What to Monitor Going Forward

Upcoming quarterly updates will be closely watched to assess North American trends, including pricing, inventory management, and channel performance between direct-to-consumer and wholesale segments. For stakeholders globally, including in Israel and the United States, Adidas’ experience underscores the operational and strategic challenges global brands face when navigating markets with elevated costs and changing consumer behavior.