Adidas is set to achieve its highest profit margin in three years, driven by the popularity of its Samba and Gazelle shoes and a slowdown in sales at Nike.
Competitor Nike recently projected a decrease in annual sales, causing concerns among investors about its competitiveness, as reported by Reuters.
While Nike’s stock dropped by up to 20%, Adidas maintained its position, indicating that investors may view Nike’s decline as an opportunity for its rival.
Retail and sporting goods analyst Simon Irwin from Tanyard Advisory mentioned, “Nike is currently not performing well in terms of products and marketing, while Adidas is experiencing a positive momentum.”
Global online searches for Adidas Samba have surged over the past year, surpassing the popular Nike Air Force 1 silhouette in December, as shown by Google Trends data.
Analysts predict that Adidas will achieve a profit margin of 51.4% in the second quarter, according to LSEG data, reaching its highest level in three years. Additionally, sales for the quarter are expected to rise by 4.5% compared to the previous year.
Meanwhile, Nike is currently grappling with its worst downturn in ten years. Earlier this year, the company announced plans to reduce 1,600 positions as part of a £1.6bn cost-cutting initiative over the next three years following a decline in sales.
Nike’s CEO John Donahoe, who took over from Mark Parker in 2022, acknowledged the performance issues by stating, “We are not at our best right now, and I take full responsibility, along with my leadership team.”
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