Adidas Steals The Buzz From Nike And Under Armour

Adidas AG has stolen the buzz in the American athletic-gear market from Nike and Under Armour lately.  The German sportswear maker reported strong sales and earnings results last week, driven by strong e-commerce business.

Adidas’ sales were particularly strong in North America, up over 10% from the previous year, exceeding the sales growth of both Nike and Under Armour.

Though Nike remains the largest company in the industry, Adidas is the most profitable, commanding a gross profit margin close to 60%, compared to 46% and 44% for Nike and Under Armour respectively—see chart.

Adidas, Nike, and Under Armour Revenues

Koyfin

Wall Street has taken notice. Under Armour shares have gained 31% since the beginning of the year compared to 29% of Under Armour and 16% of Nike—see chart.

Adidas, Nike, and Under Armour Shares YTD

Koyfin

Google Search Results Adidas vs Nike

Company Search results
Adidas 2.76 trillion
Nike 2.53 trillion
Under Armour 0.371 trillion

5/ 4/2019

Google Search Results Adidas vs Nike

Company Search results
Adidas 3.27 trillion
Nike 3.78 trillion

4/13/2019

As discussed in a previous piece here, Adidas Buzz on Wall Street and Main Street has been fueled by a number of factors, like the accumulation of a broad portfolio of brands, which include Adidas, Reebok, TaylorMade, and Runtastic. And well-targeted marketing of the 15-30 age  range groups that create  instant sales cascades for new products.

Like the cascade for NMD R1, which sold 400,000 pairs on launch day alone, and the cascade for Ultraboost, which sold 11,000 pairs in the first hour.

Adding to the marketing buzz for new products are the  innovative ways Adidas makes its products. Like its Yoga Collection, which is made from recycled ocean plastic. And its AlphaEdge 4D sneakers, which is made by using light and oxygen through a process called Digital Light Synthesis.

But there’s one more factor that spins and magnifies buzz for Adidas’s products. High profile collaborations and partnerships with celebrities and companies such as Pharell Williams, Run DMC, Kanye West, Bape, and Beyonce.

To be fair, both Nike and Under Armour have been pursuing similar strategies, having their own following among young consumers. But, for the time being, Adidas seems to have the upper hand in the world’s most important sportswear market: North America.

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