NIKE Vs adidas: Who's Winning the Race in the Athletic Footwear Arena?

Core Insights - The rivalry between NIKE Inc. and adidas AG is a significant aspect of the global athletic apparel and footwear market, with both companies competing in various metrics such as revenue growth, brand equity, and sustainability [1][2][3] Investment Case for NIKE (NKE) - NIKE is the leader in the global athletic footwear and apparel market, supported by strong brand equity and a dominant distribution network [4] - The company is implementing a "Win Now" strategy to address near-term challenges and stabilize performance, aiming for stronger growth in fiscal 2026 [5] - NIKE is focusing on its core identity in sports, accelerating product development, and enhancing brand perception through strategic marketing [6][8] - Innovation is central to NIKE's strategy, with new development models allowing for quicker responses to consumer trends [7] Investment Case for adidas (ADDYY) - adidas is undergoing a strategic turnaround under new leadership, focusing on revitalizing brand presence and improving execution [9] - The company is addressing operational challenges by cleaning up excess inventory and narrowing its product focus [10] - adidas emphasizes innovation and product credibility, with recent successful launches indicating a return of brand momentum [11][12] - Financially, adidas is setting the stage for sustainable growth and margin expansion from 2025 onward [13][14] Financial Estimates Comparison - The Zacks Consensus Estimate for NIKE's fiscal 2025 sales and EPS indicates declines of 10.7% and 45.6%, respectively [15] - In contrast, adidas's estimates suggest year-over-year growth of 12.3% in sales and 83% in EPS [16] Price Performance & Valuation - Year-to-date, adidas stock has outperformed NIKE, with a total return of 2.2% compared to NIKE's decline of 18.5% [19] - NIKE trades at a forward price-to-sales multiple of 2.02X, while adidas trades at 1.49X, indicating that adidas may be undervalued relative to its potential [23][26] Conclusion - The near-term outlook appears more favorable for adidas, which is showing signs of a focused turnaround, while NIKE is recalibrating its strategy [27][28]