Investment Rating - The report maintains a "Positive" investment rating for the textile, apparel, and luxury goods industry [11]. Core Insights - Revenue performance in Q1 2025 shows divergence among brands, with On (+40%) and Adidas (+13%) performing well, while Nike (-7%) and Under Armour (-11%) face revenue declines due to weak demand and inventory adjustments [6][20]. - The cautious revenue guidance from key companies indicates a continuation of this divergent performance in upcoming quarters, with some brands canceling their full-year guidance [7][25]. - The industry is entering a replenishment phase, but weak end-consumer demand necessitates close monitoring of recovery trends [9][34]. Revenue Performance - In Q1 2025, On and Adidas exhibited strong revenue growth, while Nike and UA struggled with declines [6][18]. - The overall revenue growth rates varied significantly across regions, with North America and Greater China showing relative weakness [20][22]. Inventory Dynamics - The apparel industry has returned to a healthy inventory level but is now entering a replenishment phase, with some brands beginning to accumulate stock [8][9]. - Retailers' inventory-to-sales ratios are normal, but certain brands are still in a destocking phase, particularly Nike and VF [8][9]. Future Outlook - The report emphasizes the need to monitor the pace of consumer demand recovery, especially as the industry faces challenges from weak demand and inflationary pressures [9][34]. - Nike's gradual operational improvement may alleviate some negative pressures on the industry, suggesting potential for a rebound in the manufacturing sector [9][34].

Group 1 - Adidas reported a revenue of €12.105 billion for the first half of 2025, a 14% year-on-year increase, with an operating profit of €1.2 billion, up 70% [1] - The Greater China region has shown consistent quality growth for nine consecutive quarters, with a revenue of €798 million in Q2, representing an 11% increase, and €1.827 billion for the first half, a 13% increase [1] - The CEO emphasized the effectiveness of the localization strategy, which focuses on understanding local needs and enhancing product performance and fashion [1][2] Group 2 - The Chinese creative team has been increasingly active since 2022, focusing on product design, brand marketing, and supply chain collaboration under a strong localization strategy [2][4] - The aim of the reforms is to regain consumer trust in Adidas, with a focus on product strength as the key to consumer engagement [4] - Adidas has been integrating its historical brand elements with Chinese cultural elements, enhancing emotional resonance with consumers [7][9] Group 3 - The Chinese consumer market has shifted from brand-oriented to self-expression, prompting Adidas to adjust its product offerings accordingly [9] - The running business has become a significant highlight for Adidas in Greater China, contributing nearly 30% growth in global running shoe sales in Q2 2025 [10] - Adidas is responding to more segmented consumer demands, with a growing number of "China-first" creative products launched monthly [12] Group 4 - The concept of "rapid and precise" product launches is emphasized, with a focus on creating products that resonate with consumers while also generating buzz [14] - The strategy includes hidden product releases in flagship stores to create a sense of discovery for consumers [16] - Social media plays a crucial role in understanding consumer needs and driving product innovation [17][20] Group 5 - The localization strategy has empowered local teams, with over 80% of products produced in China and more than half designed locally, indicating a shift towards local talent development [20][22] - The CCS team aims to become a platform for creative talent in China, fostering a connection with consumers through co-created products [22]

Core Insights - Adidas reported a 7% year-on-year revenue growth for FY2025H1, reaching €12.105 billion, with a net profit increase of 121% to €798 million [4] - The brand's revenue growth was 14% on a currency-neutral basis, with all regional markets achieving double-digit growth [4] - The company maintains its full-year guidance, expecting high single-digit revenue growth on a currency-neutral basis for FY2025, with double-digit growth for the Adidas brand [4] Market Trends - The domestic market indices showed positive performance, with the Shanghai Composite Index closing at 3,617.60, up 0.96% [3] - The textile and apparel sector experienced a decline of 2.14% this week, underperforming the broader market [5] - Retail sales of sports and entertainment products grew significantly, with a 22.2% year-on-year increase in the first half of 2025 [5] Industry Dynamics - The Chinese gold consumption in the first half of 2025 was 505.205 tons, a decrease of 3.54% year-on-year, with jewelry consumption dropping by 26% [5] - The pharmaceutical industry is seeing advancements in innovative drugs, particularly in obesity treatments with GLP-1 and Amylin therapies showing promising results in clinical trials [8][11] - In the biopharmaceutical sector, ADC drugs for lung cancer are demonstrating significant efficacy, with several products showing improved outcomes in clinical trials [10][12]

Core Insights - Adidas continues its growth momentum, reporting a global revenue of €12.105 billion in the first half of 2025, a 14% year-on-year increase, with operating profit reaching €1.2 billion, up 70% [1] - The Greater China region has shown "quality growth" for nine consecutive quarters, with Q2 revenue of €799 million, an 11% increase, and a total of €1.827 billion for the first half, a 13% rise [1] - The CEO emphasizes the effectiveness of the "localization" strategy, which has been a key focus since Adidas's rebound in 2023 [1] Financial Performance - In the first half of 2025, Adidas achieved a revenue of €12.105 billion, marking a 14% increase compared to the previous year [1] - Operating profit for the same period reached €1.2 billion, reflecting a significant 70% growth [1] - The Greater China region contributed €1.827 billion in revenue for the first half, with an 11% increase in Q2 revenue [1] Localization Strategy - The localization strategy has been pivotal in driving growth, with a focus on understanding local consumer needs and enhancing product offerings [1][22] - The Greater China team has been empowered to make decisions, allowing for greater flexibility in responding to market changes [22] - The creative team in China has been increasingly involved in product design, with over 80% of products produced locally and more than half designed in China [22] Product Development - The Shanghai Creative Center (CCS) has become a key player in product design, focusing on creating products that resonate with Chinese consumers [5][20] - Recent product launches have emphasized a blend of Adidas's historical elements with contemporary Chinese influences, enhancing emotional connections with consumers [9][20] - The running category has emerged as a significant growth area, contributing nearly 30% to global running shoe sales in Q2 2025 [12] Consumer Engagement - Adidas is adapting to the evolving Chinese consumer landscape, shifting from brand-driven to consumer-driven approaches [11] - The brand aims to balance proactive marketing with real-time consumer feedback to create products that reflect individual expression [11] - The introduction of "first launch" products has been a strategy to engage consumers and create memorable experiences [14][16] Future Outlook - The CCS aims to become a platform for creative talent in China, fostering local design and innovation [25] - The brand's commitment to local production and design is expected to enhance its cultural relevance and market position [22][23] - Adidas is focused on building emotional resonance with consumers through tailored products and community engagement [25]

Investment Rating - The investment rating for the industry is "Positive" and maintained [6] Core Insights - In FY2025Q2 (April 1, 2025 - June 30, 2025), Adidas reported revenue of €5.95 billion, which was below the expected €6.21 billion, showing a year-on-year growth of 8% at constant exchange rates, and a 12% increase when excluding the impact of Yeezy. The net profit attributable to shareholders was €370 million, exceeding the expected €340 million, with a year-on-year increase of 95%. The gross margin improved by 0.9 percentage points to 51.7%, primarily due to better product discounting and reduced shipping costs [2][4] Summary by Sections Revenue Performance - Adidas achieved revenue of €5.95 billion in FY2025Q2, which was lower than the expected €6.21 billion, with a year-on-year growth of 8% at constant exchange rates and 12% when excluding Yeezy [2][4] - The company's net profit was €370 million, surpassing the expected €340 million, reflecting a year-on-year increase of 95% [2][4] Gross Margin and Costs - The gross margin increased by 0.9 percentage points to 51.7%, attributed to improved product discounting and lower shipping costs [2][4] Market Performance - In FY2025Q2, Adidas' revenue growth in Europe, North America, and Greater China was 7%, 15%, and 11% respectively, with all markets except Europe achieving double-digit growth [10] - Direct-to-Consumer (DTC) and wholesale channels grew by 3% and 11% year-on-year respectively, indicating overall positive channel performance [10] Inventory and Cost Impacts - The inventory level was €5.26 billion, up 16% year-on-year, maintaining a healthy status in line with revenue growth [10] - Tariff impacts resulted in a negative effect of several million euros, with an expected increase in sales costs of €200 million in H2 [10] Performance Guidance - The company maintained its full-year guidance, expecting high single-digit revenue growth at constant exchange rates for FY2025, with an operating profit forecast of €1.7 to €1.8 billion, below market expectations of €2 billion [10]

Group 1: Financial Performance - Hermès reported a 9% sales growth in Q2, reaching €3.9 billion, with all regions showing growth [15] - Adidas achieved a 7.3% increase in net sales to €12.1 billion, with a significant 70% rise in operating profit to €1.2 billion [2] - Prada's net revenue for H1 reached €2.74 billion, reflecting a 9.1% growth at constant exchange rates [3] - Canada Goose experienced a robust start to the fiscal year with a 22.4% increase in global revenue to CAD 107.8 million [10] - L'Oréal's sales for H1 were €22.47 billion, with a 1.6% growth, and an operating profit margin of 21.1% [9] - SMCP reported a 2.7% increase in sales to €601.1 million, with growth in all regions except Asia [11] Group 2: Management Changes - Kering appointed Luca de Meo as CEO, offering a €20 million signing bonus, which positively impacted the stock price [4] - PUMA appointed Andreas Hubert as COO, aiming to streamline operations by integrating various functions [8] - Arena announced Mark Pinger as the new Chief Brand Officer, effective October 1, 2025 [8] - Jil Sander's CEO Serge Brunschwig resigned after six months in the position [14] Group 3: Brand and Market Insights - The performance of Prada's main brand declined by 1.9%, while Miu Miu surged by 49.2%, indicating a divergence in brand performance [3] - Hermès' leather goods sales grew by 14.8%, while the watch segment faced challenges with a 5.5% decline [15][16] - L'Oréal's digital transformation efforts are beginning to show results, with a growth acceleration from Q1 to Q2 [9] - The luxury market is showing resilience, with brands like Canada Goose capitalizing on strong demand [10]

Core Viewpoint - Adidas reported a challenging outlook in its Q2 2025 financial results, primarily impacted by U.S. tariff policies, which are expected to increase costs by approximately €200 million in the second half of the year [1] Group 1: Financial Performance - Adidas achieved Q2 revenue of €5.95 billion, reflecting a year-on-year growth of 2.2%, with a gross margin increase of 0.9 percentage points [1] - The revenue growth was largely attributed to reduced product discounts, lower shipping costs, and a strategic move to ship a significant amount of goods to the U.S. before the tariffs took effect [1] - As of the end of June, Adidas's inventory surged by 16%, reaching €5.26 billion [1] Group 2: Impact of Tariffs - The U.S. has established new trade agreements with Vietnam and Indonesia, imposing tariffs of 20% and 19% on imports from these countries, which are key manufacturing locations for Adidas [1] - Adidas CEO Bjorn Gulden expressed concerns that these tariffs could lead to broader inflation, making it difficult to predict the subsequent impact on consumer demand [1] - Other major sports brands, including Nike and Puma, have also reported significant impacts from U.S. tariff policies, with Nike experiencing an 86% year-on-year drop in net profit [2] - Nike executives indicated that U.S. tariffs could increase their costs by approximately $1 billion, highlighting that the sports consumer goods sector may be one of the most affected areas by these policies [2]

Core Insights - Adidas has rebounded from a loss in 2023 to achieve profitability in 2024, reporting double-digit sales growth across all business segments and markets for the first half of 2025 [2][4]. Financial Performance - In Q2 2025, Adidas reported total revenue of €6 billion, a 12% year-over-year increase, and an operating profit of €546 million, up 58% [4]. - For the first half of 2025, total revenue reached €12.105 billion, reflecting a 14% increase, with operating profit soaring 70% to €1.2 billion [4]. - The Greater China region saw a revenue increase of 13% to €1.827 billion, marking the ninth consecutive quarter of growth [4][6]. Market Performance - In Q2 2025, Adidas experienced an 11% revenue growth in Europe due to the high base effect from the 2024 European Championship, while North America, Latin America, emerging markets, and Japan/Korea achieved double-digit growth [6]. - Latin America led with a 25% growth rate in the first half of 2025, while the Greater China region's strong performance was driven by lifestyle business growth [6]. Product Categories - In Q2 2025, footwear revenue grew by 9%, with the ADIZERO 0 series running shoes contributing nearly 30% to global running shoe growth, which saw an increase of over 25% [4]. - Apparel revenue increased by 17%, and accessories grew by 7% in the same quarter [4]. Strategic Initiatives - Adidas is actively engaging in local events and initiatives, such as the 2024-2025 National Youth Campus Football League, to enhance brand influence among sports enthusiasts [8]. - The company is also focusing on "first consumption" strategies, launching flagship stores and collaborating with designers to attract consumer attention [10]. Future Outlook - Adidas maintains its full-year sales growth forecast at a high single-digit percentage, with operating profit expected between €1.7 billion and €1.8 billion [12]. - However, the company has warned of a potential €200 million increase in costs due to U.S. tariffs on goods from Vietnam and Indonesia, which may impact future profitability [12]. Market Trends - The popularity of retro-style shoes like Samba and Gazelle is expected to peak in 2025, with a need for new products to drive future growth [13]. - The current CEO, Bjorn Gulden, previously revitalized Puma and is now focusing on leveraging trends to enhance Adidas's market position [15].

区域市场分化明显，欧洲受高基数拖累 二季度，阿迪达斯在欧洲市场因2024年欧洲杯高基数效应，营收同比仅增长11%（剔除Yeezy影响）， 而北美、拉美、新兴市场及日本/韩国等地区均实现双位数增长。上半年所有区域剔除Yeezy影响后均保 持双位数增长，其中拉丁美洲以25%的增速领先。大中华区作为战略市场表现稳健，上半年贡献营收 18.27亿欧元，同比增长13%，持续验证本土化战略成效。 服装品类增速领先，跑鞋业务贡献显著 分品类看，二季度服装收入同比增长17%，显著高于鞋类的9%及配饰的7%。跑步业务成为鞋类增长核 心驱动力，以ADIZERO系列为代表的跑鞋收入同比增长超25%，其中ADIZEROEVOSL单款产品贡献全 球跑鞋业务近30%的增量。大中华区跑鞋上脚率在无锡、武汉马拉松中较2023年分别提升14.08%和 26.15%，专业产品与大众市场协同效应凸显。 渠道均衡发展，批发增长领先 渠道方面，二季度批发收入按不变汇率增长14%，自营零售及电商分别增长9%，延续全渠道均衡扩张 趋势。公司上半年新开设60-70家门店，并推进门店现代化改造，强化线下体验。管理层强调，全价销 售策略及与零售商的深度合作是渠 ...

Core Viewpoint - Investors in the Shoes and Retail Apparel sector should consider Adidas AG (ADDYY) and Nike (NKE) for potential value opportunities, with Adidas currently presenting a better value proposition [1]. Valuation Metrics - Adidas AG has a Zacks Rank of 2 (Buy), indicating a more favorable earnings estimate revision activity compared to Nike, which has a Zacks Rank of 4 (Sell) [3]. - The forward P/E ratio for Adidas is 23.11, significantly lower than Nike's forward P/E of 45.51, suggesting that Adidas is undervalued relative to Nike [5]. - Adidas has a PEG ratio of 0.48, while Nike's PEG ratio is 2.79, indicating that Adidas is expected to grow earnings at a more attractive rate relative to its price [5]. - The P/B ratio for Adidas is 5.62, compared to Nike's P/B of 8.57, further supporting the notion that Adidas is more favorably valued [6]. Overall Assessment - Based on various valuation metrics, Adidas holds a Value grade of B, while Nike has a Value grade of D, indicating that Adidas is the superior option for value investors at this time [7].