Summary of the Conference Call on China Athletic Wear Sales Trends Industry Overview - The conference call focused on the **China athletic wear industry**, highlighting the sales trends for major brands like **Nike** and **Adidas** [1][2]. Key Insights Overall Market Conditions - The athletic wear sales growth rates in China for December, January, and February are **challenged**, with notable differences in brand performance [1]. - **Nike** is struggling, with sales falling below expectations, while **Adidas** is outperforming expectations [1][3]. Brand Performance - **Nike**: - Sales growth is likely running at **-LSD%** (low single digits) and is a few hundred basis points below expectations [3]. - Sales growth has decelerated slightly since December, indicating a potential loss of market share [3]. - Inventory levels have worsened over the last couple of months [3]. - The expert attributes Nike's struggles to a **lack of product innovation** [3]. - Future growth is expected to be flat to slightly down, but innovation improvements are anticipated by **4QCY25**, potentially aligning growth with the industry at **+M to +HSD%** over the next year or two [3]. - **Adidas**: - Sales performance has accelerated to the **high-teens** year-to-date after a softer December, surpassing expert expectations [4]. - Growth is driven by the **Terrace franchise**, particularly the **Samba**, along with strong performances from other franchises like **Gazelle** and **SL72** [4]. - The **Adizero** line and the apparel segment are also performing well, supported by a notable influx of new products [4]. - Optimism remains for Adidas to achieve **HSD to LDD** (high single digits to low double digits) sales growth in **2025F** [4]. Consumer Behavior - Macroeconomic uncertainty is leading to cautious consumer spending in China, with a notable shift towards online shopping channels, which are generally more promotional than brick-and-mortar stores [2]. Additional Insights - Promotions have generally increased year-over-year, and while inventory levels are elevated, they are not excessively high at this point [1]. - The overall consumer spending environment remains **choppy**, reflecting broader economic uncertainties [2]. Conclusion - The China athletic wear market is currently facing challenges, with Nike underperforming and Adidas showing strong growth. Consumer behavior is shifting towards online channels, influenced by economic uncertainties. Future growth prospects for both brands will depend on product innovation and market conditions.

Core Viewpoint - Nike is facing a decline in sales, with a reported 8% decrease in revenue for Q2 FY25 compared to the previous year, and is implementing a new strategy and leadership to regain market share in sports apparel [1] Group 1: Historical Context and Strategy - Analysts suggest that Nike should revisit strategies used during its previous challenges from 2015 to 2018 when it successfully countered Adidas' Ultra Boost sneakers by increasing product launches, re-elevating the Jordan brand, enhancing demand creation spending, and managing inventory effectively [2] - Nike's current focus is on performance wear, particularly in the running segment, which has been a competitive struggle against brands like ASICS, Adidas, Brooks, and Hoka [3][4] Group 2: Product Innovation and Market Competition - Nike is expected to launch new running shoes, including the Vomero 18 on February 27, 2025, as part of its strategy to boost product offerings and regain market share [5] - The company is advised to quickly adapt and produce shoes similar to Hoka's ultra-cushioned designs to remain competitive in the market [4] Group 3: Demand Creation and Marketing Efforts - Nike reported $1.1 billion in demand creation expenses for Q2 FY25, including a significant investment in a Super Bowl ad, which was its first in nearly 30 years, featuring prominent female athletes [6] - The marketing strategy appears to be effective, as Nike topped other Super Bowl advertisers in engagement actions, indicating a positive reception to its promotional efforts [7] Group 4: Future Outlook - Analysts emphasize that for Nike to reclaim its edge in sports apparel, it must focus on launching innovative products that align with consumer preferences [6][8]

Technical Analysis - Adidas AG (ADDYY) has recently experienced a "golden cross" event, indicating a potential bullish breakout as its 50-day simple moving average has crossed above its 200-day simple moving average [1][2] - The stock has moved 9% higher over the last four weeks, suggesting upward momentum [4] Earnings Outlook - The earnings outlook for ADDYY is positive, with no earnings estimates cut and two revisions higher in the past 60 days, leading to an increase in the Zacks Consensus Estimate [4][5] - Currently, ADDYY holds a 3 (Hold) rating on the Zacks Rank, indicating a neutral stance from analysts [4] Investment Consideration - The combination of positive earnings estimate revisions and the technical breakout suggests that investors should monitor ADDYY for potential gains in the near future [5]

Core Insights - adidas AG (ADDYY) reported strong preliminary results for Q4 2024, with currency-neutral revenues increasing by 19% and 24% in euro terms [1] - The company achieved a gross margin of 49.8%, up 5.2 percentage points, and an operating profit of €57 million [1] - For the full year 2024, revenues on a currency-neutral basis rose by 12%, with a gross margin of 50.8% and operating profit exceeding €1 billion, reaching €1,337 million [2] Group 1: Financial Performance - In Q4 2024, excluding Yeezy, revenues on a currency-neutral basis increased by 18% year over year [1] - The gross margin for 2024 improved by 3.3 percentage points compared to the previous year [2] - The operating profit for 2024 saw a significant increase of more than €1 billion compared to the previous year [2] Group 2: Management Outlook - Management expressed satisfaction with the progress made in Q4 and throughout 2024, highlighting robust growth across all regions and divisions [3] - The company remains optimistic about future growth, aiming for double-digit growth with the adidas brand and a 10% margin target [4] - Final financial results for 2024 and the outlook for 2025 are expected to be released on March 5, 2025 [4] Group 3: Market Position and Strategy - adidas has maintained a strong presence in the U.S. sports apparel market, driven by its brand image and strategic growth efforts [5] - The direct-to-consumer (DTC) business has performed well, with retail stores benefiting from strong sell-out rates [6] - The company is focusing on reducing discounting activities while enhancing its online business mix, supported by innovation efforts [6] Group 4: Stock Performance - Shares of adidas have increased by 26.4%, outperforming the industry average decline of 2.6% [6]

Core Insights - Adidas plans to cut up to 500 jobs, representing nearly 9% of its 5,800 employees at its Herzogenaurach headquarters, to simplify its business operations [1][2] - The layoffs were announced shortly after Adidas reported better-than-expected preliminary profit results for the holiday quarter, with a 19% sales growth and projected sales of 5.97 billion euros, surpassing analyst expectations of 5.68 billion euros [2] - The company aims to align its operating model with current business realities, indicating that the layoffs are not part of a cost-cutting program but rather a response to changes in the business environment over the past few years [3] Business Performance - Adidas has been restructuring its operations and ended 2024 with sales and profits exceeding both analyst and company expectations [4] - The company has successfully leveraged its classic Samba and Gazelle styles to boost sales, benefiting from a slowdown at its main competitor, Nike [4]

Core Viewpoint - As of early 2025, Nike shares are near 52-week lows while Adidas stock is close to its highs, prompting a comparison of investment potential between the two companies [1] Group 1: Company Performance - Nike is facing challenges due to a need to revamp its product line and increased competition from brands like Under Armour and New Balance, leading to slower sales growth and inventory issues [3] - Adidas has capitalized on Nike's downturn by expanding its product offerings, resulting in improved financial metrics and positive market sentiment [4] Group 2: Financial Outlook - Nike's total sales are projected to decline by 10% in fiscal 2025 to $46.34 billion, down from $51.36 billion in the previous year, with a slight recovery expected in fiscal 2026 [5] - Nike's annual earnings are expected to drop 47% to $2.10 per share in fiscal 2025, compared to $3.95 in 2024, although a rebound to $2.36 is projected for fiscal 2026 [6] - Adidas is expected to see a 6% increase in total sales for FY24, with a further 10% growth projected for FY25, reaching $27.3 billion, and annual earnings forecasted to rise to $2.15 per share from a loss of -$0.36 in FY23 [8] Group 3: Valuation Metrics - Nike is trading at $71 per share with a forward earnings multiple of 34.3X, while Adidas is priced at $125 with a multiple of 30.9X, both above the S&P 500 average of 22.1X [9] - In terms of price to sales, Adidas is more attractive at under 2X, while Nike stands at 2.3X [10] Group 4: Dividend Comparison - Nike offers a 2.22% annual dividend yield, significantly higher than Adidas's 0.19% and the industry average of 1.92% [12] Group 5: Investment Sentiment - Adidas currently holds a Zacks Rank 3 (Hold), while Nike is rated Zacks Rank 5 (Strong Sell), indicating a more favorable outlook for Adidas despite Nike's appeal to income investors [14]

Core Viewpoint - The analysis presents a neutral stance on Adidas, acknowledging the potential for growth in the low-teens percentage range, but also highlighting a history of the company missing guidance [1]. Summary by Relevant Sections - **Growth Potential**: Adidas has the potential to accelerate growth to low-teens percentages based on multiple data points and indicators [1]. - **Historical Performance**: The company has a track record of missing guidance, which raises concerns about its ability to meet future growth expectations [1]. - **Investment Philosophy**: The investment approach discussed emphasizes value investing principles and a focus on long-term growth, suggesting a strategy of buying quality companies at a discount to their intrinsic value [1].

Financial Data and Key Metrics - Currency-neutral growth of 10.3% in Q3 2024, with underlying adidas business (excluding YEEZY) growing 14% [7] - Gross margin reached 51.3%, the first time adidas business margin exceeded YEEZY [7] - EBIT increased by almost 50% to €598 million, with an EBIT margin of 9.3% [7] - Net income of €469 million, with basic earnings per share of €2.44, up 75% [49] Business Line Data and Key Metrics - Footwear grew by 14%, Apparel by 5%, and Accessories by double digits [20] - Performance products grew by 10%, Sportswear by 4%, and Original basketball partnerships and skateboarding by 20% [21] - Wholesale business grew by 13%, Own Retail by 15%, and E-commerce (excluding YEEZY) by 25% [12][13] Market Data and Key Metrics - North America showed slight growth in the adidas business, with optimistic outlook for Q4 and Q1 [8] - Europe grew by 18% (21% underlying), China by 8%, Japan and South Korea by 17%, and LatAm by 30% [9][10] - Emerging markets grew by 20%, contributing to the overall 10% growth [10] Company Strategy and Industry Competition - The company continues to invest heavily in sales and marketing, with a focus on leveraging future growth [7] - Expansion into new markets such as Iraq, Bangladesh, Uzbekistan, and Nigeria through franchise partners [19] - Focus on localizing products and marketing to cater to regional differences [57] Management Commentary on Operating Environment and Future Outlook - Management expressed confidence in achieving double-digit growth and a 10% EBIT margin in the medium term [66] - The company aims to be a "good company" in 2024 and a "healthy company" by 2026, with a focus on gross margin between 50%-52% and 12% investment in marketing [58] - The summer of sports events positively impacted growth, fueling momentum into Q3 [6] Other Important Information - The company settled YEEZY-related claims, resulting in a €100 million release in other operating income, offset by a €100 million donation [45] - Inventory levels are healthy, with 80% of inventory being current or future season products [90] - The company plans to open new stores in smaller Chinese cities and expand into new markets with franchise partners [18][19] Q&A Session Summary Question: Ability to maintain current top-line growth - The company expects to maintain double-digit growth in the future, with differences across categories, channels, and markets [66] Question: Impact of expanding SKU counts on profitability - Expanding SKU counts is expected to positively impact profitability, with a focus on having the right products for each market [67][70] Question: Drivers of North America growth - Growth in North America is driven by improved brand heat and positive retailer order books, with a focus on performance and lifestyle products [73] Question: OpEx and restructuring costs - The company incurred one-time costs related to Runtastic and IT infrastructure impairments, with ongoing efforts to optimize operating expenses [75] Question: EBIT guidance and CapEx - The company expects to spend less than the guided €600 million in CapEx for the year, with a focus on disciplined investment [78] Question: Share buyback and cash generation - The company prioritizes investing in the business and being a solid dividend payer, with potential for share buybacks in 2026 [85][86] Question: Inventory management and specialty running progress - The company has managed inventory effectively, with no issues expected in fulfilling Q4 demand [88] - Progress in specialty running is improving, with efforts to rebuild relationships with specialty retailers [88] Question: Full price sell-through and business model changes - The company sees potential for higher gross margins in 2025, with ongoing optimization of the business model [97] Question: Current trading and tariff trends - October trading is positive, with no significant changes in demand or promotional activity [100] - Tariff trends are strong but represent a balanced portion of overall sales, with growth across all categories [100]

Adidas has reached an out-of-court settlement with rapper Ye to end all legal proceedings between them, the sportswear brand said on Tuesday, adding that no money changed hands in the agreement. Adidas and Ye had been embroiled in multiple lawsuits for the past two years, since the German company ended a partnership with the rapper previously known as Kanye West over antisemitic comments he made. "There isn't any more open issues, and there is no… money going either way, and we both move on," CEO Bjorn Guld ...

本文为IPO早知道原创 作者｜Stone Jin 微信公众号｜ipozaozhidao 据IPO早知道消息，阿迪达斯于10月29日发布了2024年第三季度财报。 财报显示，今年第三季度，阿迪达斯全球营收64.38亿欧元，在货币中性下（下同）较上年同期增长 10%，若剔除Yeezy影响，则同比增长14%；营业利润5.98亿欧元，较上年同期增长46.0%。 其中，作为最为重要的战略市场之一， 阿迪达斯大中华区业绩稳中有进，连续六个季度实现"有质量 的增长"。今年第三季度，大中华区营收9.46亿欧元，同比增长9% 。 全市场、全渠道、全品类均实现增长。 本文由公众号IPO早知道（ID：ipozaozhidao）原创撰写，如需转载请联系C叔↓↓↓ 同时，阿迪达斯基础毛利率和库存也在持续改善——今年第三季度，阿迪达斯毛利率51.3%，较上 年同期提升2.0个百分点；截至2024年9月30日，库存较上年同期减少7%，这些都为阿迪达斯未来 业绩稳健增长奠定了坚实的基础。 阿迪达斯全球CEO古尔登表示，"对我们而言，第三季度的增长非常强劲，再次好于预期。尤为值得 一提的是，第三季度阿迪达斯在全市场、全渠道、全品类均实现了增长 ...