Gymshark announced a reduction in profits for the previous year, as tariff policies from the Trump administration pose potential risks to its significant operations in the United States, threatening to disrupt the brand’s 12-year trend of consistent revenue growth.

For the fiscal year ending July 2024, pre-tax profits decreased from £13.1 million to £11.9 million. This decline comes as the influential British athleisure brand invests in expanding its presence with new retail locations in London, New York, Dubai, Amsterdam, and Manchester.

Ben Francis, the 32-year-old co-founder and CEO of the Solihull-based brand, retains over 70% ownership of Gymshark, while private equity firm General Atlantic and management hold the remainder. The company did not distribute dividends, though the compensation for its top director increased to £1.15 million from £968,000 last year, and it has doubled compared to 2022.

Despite the decline in pre-tax profits, sales continued to rise, marking the twelfth consecutive year of growth. Total sales surpassed £600 million for the first time, as detailed in the latest accounts filed with Companies House.

Sales grew to £607.3 million from £556.2 million, fueled by a 14.1% increase in orders and a 13.6% uplift in units sold. Gymshark’s gross profit margin improved to 63%, up from 60% the previous year.

On an adjusted basis, earnings before interest and taxes increased by 14% or £6.4 million, reaching £51.7 million.

Gymshark attributed the decline in profits to “intense macroeconomic volatility,” which has put approximately 296 positions—around one-third of its workforce—at risk during a restructuring process. Concurrently, the company announced it would be creating 168 new roles.

As a privately held entity, Gymshark does not have to disclose the prospective effects of the proposed tariffs from Trump’s administration, yet these tariffs could significantly impact its business. Approximately 40% of Gymshark’s sales originate from the US, where the company operates an office in New York after relocating from a Denver location that employed over 120 individuals.

The brand sources some of its products from China and a smaller portion from Vietnam, which may become more costly if new tariffs are enforced. Currently, the US imposes import tariffs of 145% on products from China and 46% from Vietnam, though tariff enforcement on Vietnam has been paused.

Gymshark is among a growing cohort of British retailers, including Boden, Lush, and Fortnum & Mason, that are vulnerable to fluctuations in US trade policies and consumer trends.

Francis commented, “Looking ahead, it’s clear that the retail sector is experiencing substantial pressures from macroeconomic factors. Therefore, we are prioritizing expenditure control to position ourselves for success as a fully omnichannel brand and to achieve our vision of becoming a lasting, 100-year-old company that delivers the best gym products to our customers.”

Founded in Birmingham from Francis’s bedroom with friends in 2012, Gymshark has emerged as one of the UK’s most successful global fashion enterprises. It attained unicorn status in 2020, boasting a valuation exceeding £1 billion, primarily due to a significant investment from General Atlantic, which acquired a 21% stake in the company.