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Shares of Adidas and Puma Fall After Nike Results

March 22, 2024
minute read

Nike, the leading global seller of athletic apparel, reported on Thursday that its fiscal third-quarter net income had declined by 5% due to a combination of stagnant sales and increased expenses.

Following Nike's results, shares in Europe's top sportswear companies experienced declines. Puma shares dropped by 2%, having already lost 23% of their value year-to-date. Similarly, Adidas shares fell by 1%, despite having gained 7% in 2024 thus far. JD Sports shares also suffered a 3% decline, adding to the 30% decrease observed in 2024.

Nike's lackluster performance cast a shadow over its recent announcement of replacing Adidas as the official supplier to Germany's national football team in 2027, marking the conclusion of a longstanding partnership between Adidas and the German team.

Based in Oregon, Nike announced plans to invest in marketing efforts to expand its market reach and enhance product presentation in stores operated by its wholesale partners, including Foot Locker.

Analysts interpreted Nike's mixed results as a potential sign of mounting challenges for major sportswear companies in Europe. However, they also viewed it as an opportunity for competitors to capture a portion of Nike's market share.

Citi analysts suggested that Nike's cautious product management strategy, aligned with its focus on innovation and freshness, could present a short-term opportunity for rivals like Adidas and Puma, while potentially impacting retailers like JD Sports. Surveys cited by Citi analysts indicated that Adidas is gaining traction against Nike in North America, China, and Europe in terms of consumer perception of top sportswear brands.

On the other hand, Jeffries analysts, led by James Grzinic, noted that while Nike's flat sales might seem advantageous for its European competitors, the U.S. company's decision to increase marketing spending by 10% to $1 billion could offset any potential benefits to companies like Puma or Adidas.

Peel Hunt analysts, led by Jonathan Pritchard, remarked that Nike's statements positioned it as the latest among several sports retailers expressing caution about the outlook for early FY25. They suggested that European rivals might issue similar forecasts.

The analysts anticipated that JD Sports would also indicate a challenging period in its upcoming update, projecting that the company's FY25 performance would likely align with predictions made by others, including Nike.

Adan Harris
Managing Editor
Eric Ng
John Liu
Editorial Board
Bryan Curtis
Adan Harris
Managing Editor
Cathy Hills
Associate Editor

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