adidas(US:ADDYY) ZACKSยท2025-06-17 15:06Industry Overview - The Zacks Shoes and Retail Apparel industry is facing significant challenges due to rising input and logistics costs, supply-chain disruptions, and increased SG&A expenses from digital and store reinvestments [1][4] - Macroeconomic pressures such as currency volatility, geopolitical tensions, and changing tax and tariff policies are exacerbating these challenges [1][4] - Weak consumer confidence and a competitive labor market are threatening operating margins across the industry [1][4] Consumer Demand Trends - Despite challenges, there is robust consumer demand for activewear, footwear, and wellness-driven products, supported by a growing focus on healthy lifestyles [2][5] - Companies are prioritizing product innovation, expansion of athleisure offerings, and enhanced investment in e-commerce and omnichannel capabilities to leverage this demand [2][5] E-Commerce Investments - E-commerce is a key growth driver in the athleisure market, with companies building their customer base through digital platforms [6] - Investments in faster delivery and improved supply chains are expected to provide a competitive edge [6] Financial Performance - The Zacks Shoes and Retail Apparel industry has underperformed the broader Zacks Consumer Discretionary sector and the S&P 500, with a collective decline of 33.6% over the past year [10] - The industry is currently trading at a forward 12-month P/E of 24.41X, higher than the S&P 500's 21.86X and the sector's 19.45X [13] Company Highlights - Birkenstock: The company has sustained strong demand for its premium lines, with a projected sales growth of 21.8% and earnings growth of 36.7% for fiscal 2025 [17] - Adidas: The company is benefiting from strong demand and improved margins, with a projected sales growth of 12.3% and earnings growth of 86.1% for 2025 [22] - Wolverine: The company is focusing on strengthening its DTC business and has a projected sales growth of 3.6% and earnings growth of 15.4% for 2025 [25]