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Adidas Poised to Gain as Nike Faces Challenges

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Adidas, the German sportswear giant, is projected to report strong second-quarter sales and its highest profit margin in three years, driven by the popularity of its low-rise, multicolored Samba and Gazelle sneakers, and weaker sales from rival Nike.

Concerns among investors about Adidas trailing behind both established and emerging competitors were heightened when Nike unexpectedly lowered its annual sales forecast at the end of June. In an effort to boost sales, Nike announced the global launch of new trainers priced at $100 and below. Meanwhile, Adidas has been capitalizing on the trend for its three-striped shoes, like the Samba and Gazelle, by releasing limited editions and new colors to maintain customer interest.

According to LSEG data, analysts expect Adidas to report a 51.4 percent profit margin for the second quarter, marking its highest point in three years. Quarterly revenue is anticipated to reach €5.6 billion ($6.1 billion), a 4.5 percent increase from the same period last year. However, Adidas must remain vigilant as other companies are gaining ground, particularly in the running and outerwear sectors. A recent RBC study revealed that emerging sportswear brands such as Hoka, Lululemon, New Balance, and On Running had a global market share of 35 percent in 2023, up from 20 percent during the 2013–2020 period.