Adidas' CEO told CNBC on Wednesday that terror attacks in Europe are taking a toll on consumers on the continent.
Kasper Rorsted said that while his company has outperformed in the retail sector and has managed to buck the overall downward trend, Adidas' current numbers are reflective of European consumer concern.
Uncertainty over this week's U.K. election, the British exit from the European Union and the upcoming German vote is also weighing on consumers.
"You are seeing fairly conservative consumer sentiment which is also impacting the overall consumer spending," Rorsted told CNBC.
"We're not really seeing any optimism flowing through, and the recent terrorist attacks are clearly setting a mark on consumers."
The recent decline in German-American relations after mutual recriminations between President Donald Trump and German Chancellor Angela Merkel is another headwind.
Still, the CEO stressed the importance of Europe's connection to the United States.
"I think most Europeans feel emotionally very connected to the U.S.," Rorsted said. "I think emotionally it's a very difficult period of time."
He said Germany-based Adidas is focusing on the positives. "We're a global company. We've created 13,000 jobs in the U.S., which we have today." He says the key, though, is figuring out how — as a business — to operate in these two potentially separate environments.