Adidas benefits as Nike struggles

Editorial Auge July 9, 2024

The success of Adidas' multicolored Samba and Gazelle low-top sneakers, coupled with weaker sales at rival Nike, should help the German sportswear brand post solid second-quarter sales and its highest profit margin in three years.

The success of Adidas' (ADSGn.DE) multicolored Samba and Gazelle low-top sneakers, coupled with weaker sales at rival Nike, should help the German sportswear brand post solid second-quarter sales and its highest profit margin in three years.

Nike (NKE.N) forecast a surprise drop in annual sales at the end of June, raising investor concerns that the sportswear giant could fall behind established competitors and new rivals.

Nike shares fell as much as 20% following the news, but Adidas shares, which normally track the U.S. company's moves, barely reacted, suggesting investors see Nike's weakness as an opportunity for Adidas. "Nike, in terms of product and message, is very much off its game and Adidas is having its moment," said Simon Irwin, consumer goods and sports analyst at Tanyard Advisory.

Nike is less innovative than in the past and competition has increased, providing retailers with a wider range of brands to choose from.

Nike said in late June that it would launch new sub-$100 sneakers worldwide to try to regain sales.

Meanwhile, Adidas has been pushing a trend with its three-striped shoes like the Samba and Gazelle, releasing new colorways and limited editions to keep shoppers interested.

Online searches for "Adidas Samba" have skyrocketed worldwide in the last twelve months, surpassing searches for "Nike Air Force 1

Collaboration: Grupo Auge | Reuters (International).

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