Core Points - Adidas faces controversy over its new shoe "Oaxaca Slip-On," which is accused of cultural appropriation of traditional Mexican huarache sandals, leading to strong criticism from Mexican politicians [2] - The company has issued an apology, acknowledging the cultural significance of the Mexican indigenous community and the craftsmanship involved [2] - The shoe was developed in collaboration with Mexican designer Willy Chavarría, who also apologized for the unauthorized use of cultural elements [2] Financial Performance - Footwear contributes over half of Adidas's revenue in 2024, aiding the company in returning to profitability [3] - Adidas experienced a decline in net profit from 2021 to 2023, with 2023 marking its first loss since 1992 [4] - Key drivers for revenue growth in footwear include soccer shoes, running shoes, and the resurgence of classic models like Samba, which saw a 300% increase in sales [4] Recent Financial Results - In Q2 2025, Adidas reported global revenue of €5.952 billion, a 2.2% year-on-year increase, with net profit rising by 94.6% to €369 million [5] - Footwear revenue grew by 9%, with the ADIZERO 0 series running business increasing by over 25% [5] Impact of Tariffs - Adidas's CEO, Gulden, indicated that the company faced tens of millions of euros in impact from tariffs in Q2, with an expected increase in product costs of €200 million in the U.S. [6] - The company does not plan to pass on increased costs to other markets [6] Cultural Appropriation Context - The controversy surrounding cultural appropriation differs from simple plagiarism, as it involves unclear boundaries of original IP and adjustments made to distinguish from the original [7] - Experts suggest that brands should communicate with original IP holders before using cultural elements to avoid potential infringement [8]