EnSportswear maker Adidas is scheduled to report fourth quarter results on March 8, with analysts surveyed by Bloomberg expecting a 12.6% growth in revenues on a year earlier. Panjiva data for its U.S. imports indicate a 108% growth compared to a year earlier. That likely reflects a shift in its supply chain strategy as its revenues in the third quarter for North America only increased 19.5%. One notable area of growth has been its imports from Indonesia, which represented 17.4% of its imports for the fourth quarter from 1.8% a year earlier.
Source: Panjiva
The bigger challenge for the company than sales in the U.S. will be sourcing. As outlined in Panjiva research of January 18, Adidas CEO Kasper Rorsted has stated that the Trump administration’s trade policies are unlikely to lead to a change in strategy as the whole industry “has the same business model”.
Panjiva analysis of over 500 country-and-product combinations in Adidas’s imports shows its largest exposure is to shoe imports from Vietnam – these accounted for 32.2% of all sourcing in the past 12 months. The decision by the Trump administration to withdraw from the Trans-Pacific Partnership trade deal, which included Vietnam and would have cut tariffs, therefore has a direct cost.
The company also has a very diversified sourcing structure. While the top three supplying countries account for 71.3% of its shipments to the U.S. all three (including Indonesia and China) produce its top six lines. In aggregate it sources shoes from 27 countries and t-shirts from 30 countries. The company is continuing to diversify. Bloomberg reports that the company is building a U.S. shoe factory in Atlanta to open this year, though it will only produce 0.2% of its global output and will be largely automated.
Source: Panjiva
