No investor likes a recommendation downgrade. Investors clearly weren't ready to play with shares of Adidas (ADDYY -1.94%) on the second trading day of the week. The athletic wear company's U.S.-traded shares lost nearly 2% in value on a day when the market generally did well, with the S&P 500 index closing 0.5% higher. Adidas didn't have any negative news of its own to report, but an analyst's new take on the stock triggered the sell-off. Downgraded from buy to hold The person behind the move was Barclays ...

For those looking to find strong Consumer Discretionary stocks, it is prudent to search for companies in the group that are outperforming their peers. Adidas AG (ADDYY) is a stock that can certainly grab the attention of many investors, but do its recent returns compare favorably to the sector as a whole? Let's take a closer look at the stock's year-to-date performance to find out. Adidas AG is one of 280 companies in the Consumer Discretionary group. The Consumer Discretionary group currently sits at #10 w ...

For those looking to find strong Consumer Discretionary stocks, it is prudent to search for companies in the group that are outperforming their peers. Adidas AG (ADDYY) is a stock that can certainly grab the attention of many investors, but do its recent returns compare favorably to the sector as a whole? A quick glance at the company's year-to-date performance in comparison to the rest of the Consumer Discretionary sector should help us answer this question. Adidas AG is a member of our Consumer Discretion ...

Alex, we have time for two more questions. Operator Monique Pollard Perfect. Thank you. Sebastian Steffen Thanks. The next question comes from the line of Jonathan Komp, Baird. Please go ahead. Yes. So there shouldn't be any misunderstanding, I'm confident on double-digit growth in the second half as we promised you. What I said that some of the orders that we meant for Q3 was actually delivered in Q2 because our retail partner was screaming for product. That's what I tried to say. But the demand will be do ...

Industry Overview - The Zacks Shoes and Retail Apparel industry includes companies that design, source, and market clothing, footwear, and accessories for various demographics [2] - The industry is currently facing challenges such as elevated costs, reduced discretionary spending, and increased marketing investments, which are impacting profits [12] Consumer Demand Trends - There is a strong consumer demand for activewear and athleisure products, which is expected to continue into 2024 [15] - Companies are focusing on product innovations, active promotions, store expansion, and enhancing e-commerce capabilities to capture market share [15] Cost Headwinds - Companies are experiencing elevated costs due to commodity cost inflation, supply-chain constraints, and increased logistic costs, which are expected to hurt margins in the near term [3] - Rising SG&A costs due to marketing expenses and investments in digital operations are also a concern for industry players [3] E-Commerce Investments - E-commerce is crucial for growth in the athleisure market, with companies investing in digital channels to build customer bases [4] - Efforts to enhance delivery systems and improve in-store experiences are expected to drive traffic and transactions [4] Stock Market Performance - Stocks in the industry have collectively declined by 28%, while the Zacks Consumer Discretionary sector and the S&P 500 have risen by 2.7% and 23.7%, respectively [7] - The industry is currently trading at a forward 12-month P/E of 18.28X, compared to the S&P 500's 21.5X and the sector's 16.6X [8] Company Highlights - **Caleres**: The company is benefiting from positive consumer demand trends and strong performances from its brands, with a focus on omnichannel growth [11][22] - **Skechers**: The company is investing in e-commerce and distribution, with expected growth in sales and earnings of 10.6% and 16.9%, respectively, for 2024 [21] - **Adidas**: The company is poised to gain from strong demand and improved margins, with a projected sales growth of 5.1% for 2024 [23][33] - **Wolverine**: The company is focusing on improving efficiency and expanding its DTC business, which is expected to contribute positively to its performance [29]

With the European Cup underway, it might be worth considering how sports play a role in the broader perception of companies. Some companies, despite being relatively unknown, pour significant sums of money into marketing during major sporting events. Other stocks are directly linked to the sporting events, giving them a leg up in organic marketing and product placement. Adidas (ADDYY) Now, with the release of several redesigned retro shoes, like the Samba and Gazelle, Adidas has also successfully broken int ...

Adidas is apparently looking to bring lower-cost shoe models to the market. Reuters reported Thursday the sportswear company indicated Samba and other shoes will become more affordably priced options in the $60 to $80 range. "It's important to understand that not everyone can afford to buy a shoe for $120 or $150, but everyone wants to take part in the same trends," CEO Bjorn Gulden told investors. GET FOX BUSINESS ON THE GO BY CLICKING HERE "What we do at the top, $100 and higher, we're bringing that down. ...

Financial Data and Key Metrics Changes - The operating profit increased significantly to €336 million, up from €60 million a year ago, with the underlying adidas contribution around €290 million [3] - Gross margin improved from 44.8% in Q1 2023 to 51.2% in Q1 2024, a significant increase of 640 basis points, with the underlying margin without Yeezy at approximately 50.5% [12][38] - Cash improved from €778 million to over €1 billion, a 40% increase, with a target of €1.5 billion considered a good number for the balance sheet [16] Business Line Data and Key Metrics Changes - The split between wholesale and direct-to-consumer (D2C) sales is 62% and 38%, respectively, with retail stores accounting for 21% and e-commerce for 17% [7] - Lifestyle footwear is experiencing strong growth, particularly in the Terrace line, which includes successful products like Samba and Campus [29][34] - Apparel is expected to grow as excess inventory issues are resolved, with new lifestyle apparel launches planned for the U.S. market this summer [54] Market Data and Key Metrics Changes - North America saw a decline of 4%, but inventory levels decreased by 41% compared to the previous year, indicating a cleaner inventory situation [4] - Greater China reported an 8% growth, with expectations for double-digit growth by year-end despite a challenging economic environment [30][81] - Latin America experienced an 18% increase in sales, with inflation impacting the market dynamics [93] Company Strategy and Development Direction - The company is focused on maintaining a healthy inventory and gross margins while investing heavily in marketing to build momentum [5][39] - There is a strategic emphasis on local partnerships and adapting to market demands, with a shift towards more localized supply chains [58] - The company aims to achieve a 10% EBIT margin by 2026, with a focus on sustainable growth and quality over quantity [82][85] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the second half of the year, expecting a turnaround in North America and continued growth in other markets [4][19] - The company is cautious about the Yeezy inventory, with no assurance of complete sell-through, leading to conservative guidance [46] - The outlook for net sales growth has been revised from mid-single digits to mid- to high single digits, with EBIT expected to grow from around €500 million to €700 million [17][29] Other Important Information - The company is investing in new stores in various markets, including India and Ukraine, where business performance remains strong despite challenges [7] - The marketing budget is expected to remain around 12% of revenues, with no significant risk of increases due to competitive pressures [92] Q&A Session Summary Question: What is the expected revenue growth cadence for the remainder of the year? - Management indicated that if retail success continues, double-digit growth could be achieved in the second quarter, with certainty of double-digit growth in the second half [20][21] Question: How is the performance business doing compared to lifestyle? - The performance business is growing in high-end categories, but lifestyle is currently outpacing it in overall growth [22][74] Question: What are the plans for apparel moving forward? - The company is relaunching lifestyle apparel and expects to see growth in this segment as excess inventory issues are resolved [54] Question: How is the company managing its marketing budget in light of local competition? - The marketing budget is expected to remain stable at 12% of revenues, with no significant risk of increases despite competitive pressures [92] Question: What is the outlook for the Chinese market? - The company expects to continue growing in China, aiming for double-digit growth despite current economic uncertainties [81]

Key PointsAfter the market sold off on disappointing Fed announcements, some of the market's most valuable brands also became bargains.With double-digit upside ahead of them, according to analysts, investors need to add these to a watchlist soon. If the Fed does decide to cut rates in September, these names would make for a massive rally opportunity.5 stocks we like better than adidasMarkets were scared to wake up to the Federal Reserve (the Fed) pulling the rug. After pricing in the proposed interest rate ...

Adidas shoes are displayed at a DSW store on January 31, 2024 in Novato, California.Shares of Adidas jumped 6.3% on Wednesday after the company unexpectedly raised its full-year guidance and reported a year-on-year profit increase in the first quarter. The German sportswear company said that it now expects currency-neutral revenues to increase at a mid-to high-single-digit rate in full-year 2024, compared with a previous projection of growth near a mid-single-digit rate.Operating profit for the year is now ...