Despite tariff headwinds, Brooks Running keeps pace

Brooks Running is old enough to remember the country’s last major tariff controversy.

The athletic brand started out as a manufacturer of specialized footwear in Philadelphia in 1914, later moving its headquarters to the Seattle area. American shoemaking was an industry targeted for protection by the Smoot-Hawley Tariff Act of 1930, which taxed footwear imports at about 20%.

In today’s global economy, footwear remains a protected category with high tariffs — but now Brooks is the one paying them.

Nearly 40 years ago, Brooks shifted manufacturing of its running shoes to Southeast Asia, a trend across the athletic footwear industry. The shoes are designed at Brooks’ brand-new headquarters in Seattle’s Fremont neighborhood, but they’re manufactured overseas.

That means Brooks is on the hook for an additional tariff of about 20% under the Trump administration's trade policy.

A combined 40% tariff is enough to make any CEO quake in their sneakers, but Brooks' Dan Sheridan said the company has managed to largely absorb the additional costs because running is having a big moment.

"We think it's a coalition of generations," Sheridan said. "If you think about Boomers, you think about Gen X, you think about Millennials and Gen Z, all of those generations are focused on health and wellness, nutrition, longevity."

"They all have idiosyncrasies, obviously, across the generations," Sheridan continued, "but what we're seeing for the first time in Gen Z is they are participating in the sport of run earlier than any generation before them."

New York City marathon runners in their 20s increased by 50% from 2019 to 2024, mirroring an international trend. And Brooks has been well-positioned to take advantage.

During that same time period, Michael Eaton has seen the running club he started out of the Brooks flagship store swell in popularity. In 2019, just a handful of runners showed up. Today, between 15 and 40 runners meet twice a week.

“ Running's hot right now, which is great for business, but also great for group run and community,” Eaton said.

The boom has insulated Brooks from tariffs — to a degree. Sheridan said Brooks has only increased the cost of its running shoes by 2% since the trade war started. The company is planning a similar price increase next year.

“We had a record second quarter here at Brooks," Sheridan said, noting the business grew nearly 20% year over year. "Our international business is growing upwards of 35%, so we don't want to dampen the momentum we have from some tariff increases.”

Brooks is a privately held company owned by Warren Buffett’s Berkshire Hathaway. Sheridan said that also allows Brooks to make longer-term investments because it isn’t reporting quarterly earnings to Wall Street.

Right now, the company is prioritizing customer acquisition in other countries, and exploring whether automation could allow some manufacturing to be re-shored domestically.

But despite strong demand for running products, industry experts say even modest price increases are cause for concern.

Matt Priest, CEO of Footwear Distributors and Retailers of America trade says recent inflation data showing a 1.4% to 2.8% increase in footwear prices should serve as the canary in the coalmine for the industry.

“As we have said since the beginning of the trade and tariff uncertainty, our industry would do everything within our power to shield American consumers from the brunt of the increased tariffs placed on footwear,” Priest said in a statement to KUOW.

“That said, across the broader footwear industry, we’re seeing many companies struggle to absorb the tariff burden without passing on more substantial price hikes," he added. "The reality is these tariffs act as direct taxes on imported goods, and they continue to challenge brands and retailers alike.”