Nike, the premier global vendor of athletic apparel, recently announced that its fiscal third-quarter net income had decreased by 5% due to a blend of flat sales and rising expenses.
In response to Nike’s performance, the shares of Europe’s leading sportswear companies saw declines. Puma’s shares experienced a 2% drop, having already depreciated by 23% year-to-date.
Similarly, Adidas witnessed a 1% decline, notwithstanding a 7% increase in 2024 up to now. Additionally, JD Sports saw its shares dip by 3%, contributing to the 30% decrease observed in 2024.
Nike’s recent announcement of replacing Adidas as the official supplier to Germany’s national football team in 2027 was overshadowed by its lackluster performance, bringing an end to the longstanding partnership between Adidas and the German team.
According to reports, the Oregon-based company, Nike, intends to boost its marketing efforts to widen its market reach and improve product presentation in stores operated by its wholesale partners, such as Foot Locker.
The Industry experts stated that analysts see Nike’s mixed results as indicative of potential mounting challenges for major sportswear companies in Europe. Nevertheless, they also perceive this as an opportunity for competitors to seize a portion of Nike’s market share.
Citi analysts have highlighted Nike’s cautious approach to product management, emphasizing its commitment to innovation and freshness. They suggest that this strategy could create a short-term window of opportunity for competitors such as Adidas and Puma, while also affecting retailers like JD Sports.
According to surveys referenced by Citi analysts, Adidas is making strides against Nike in North America, China, and Europe in terms of consumer perception of leading sportswear brands.
Conversely, Jeffries analysts, led by James Grzinic, pointed out that while Nike’s stagnant sales might appear advantageous for its European counterparts, the American company’s decision to boost marketing expenditure by 10% to $1 billion could counterbalance any potential gains for companies like Puma or Adidas.
In commentary led by Jonathan Pritchard, analysts at Peel Hunt noted Nike’s recent statements, which placed it in line with several other sports retailers expressing reservations regarding the early outlook for FY25. They indicated the possibility of similar forecasts emerging from European competitors.
Anticipating JD Sports’ forthcoming update, the analysts projected a tough period ahead, expecting the company’s performance in FY25 to mirror the sentiments echoed by Nike and other industry players.
