Investment Rating - The report maintains an "Outperform" rating for the sports brand industry [6][10]. Core Insights - The sports outdoor industry is projected to reach approximately $400 billion in 2024, with a year-on-year growth of 3.8%, indicating a stable growth phase post-pandemic, but with significant brand performance differentiation [1][17]. - Nike, Adidas, and Asics have shown distinct stock price trends since 2019, with Nike experiencing a V-shaped recovery, Adidas an N-shaped reversal, and Asics achieving nearly a tenfold increase [1][25][28]. - The underlying performance of these brands is driven more by their operational results than by valuation fluctuations [1][33]. Summary by Sections Industry Trends - The global sports outdoor industry is entering a stable growth phase post-pandemic, with a notable shift in competitive dynamics and brand performance differentiation [17]. - The market share of leading brands like Nike and Adidas has declined, while local brands such as Li Ning and FILA have gained traction [18]. Company Analysis Nike - Nike's stock price has shown a downward trend due to supply chain disruptions and inventory issues, with a significant drop of 50% from its peak in early 2023 to April 2025 [2][47]. - The company is facing challenges with over-reliance on classic models and a decline in consumer interest, as indicated by a drop in Google search index since Q2 2023 [2][47]. - Nike plans to revitalize its brand through enhanced sports marketing and new product launches [2]. Adidas - Adidas has successfully pivoted its product strategy, focusing on fashion and running categories, leading to a significant stock price recovery [3][27]. - The new CEO has driven a turnaround by optimizing inventory and enhancing brand performance, with a notable increase in marketing efficiency [3][27]. - The brand's focus on localized strategies and retro product lines has contributed to its resurgence [3]. Asics - Asics has experienced a remarkable stock price increase, driven by a strong product cycle and a focus on high-end professional running shoes [4][28]. - The brand has successfully capitalized on the running trend and has built a robust ecosystem around running events [4][28]. - Asics' marketing expenditures are lower than its competitors, yet it has effectively built brand strength through strategic sponsorships and collaborations [4]. Investment Recommendations - Investors are advised to track the product cycles of sports brands, focusing on key marketing events and the subsequent commercial performance [5]. - The report highlights the importance of identifying new product opportunities and adjusting supply strategies as brands transition through different product cycle phases [5]. - Specific recommendations include monitoring Nike's new product cycles and Adidas' ongoing product strategy, while also considering local brands like Anta and Li Ning for their growth potential [9].

Investment Rating - The investment rating for the textile and apparel industry is "Outperform the Market" [2][6]. Core Insights - The worst period for Nike has passed, with expectations for gradual improvement in FY2026, driven by the "Win Now" strategy and easing tariff impacts [4][5][42]. - FY2025 revenue was $46.31 billion, a 10% decline year-over-year, slightly exceeding Bloomberg consensus expectations [3][8]. - The fourth quarter of FY2025 saw revenue of $11.1 billion, down 12% year-over-year, but better than previous guidance and consensus [5][18]. Summary by Sections Performance and Guidance - FY2025 Q4 revenue exceeded Bloomberg consensus and management guidance, indicating that the worst financial impacts from the "Win Now" strategy are behind [4][5]. - The company expects revenue in FY2026 Q1 to decline in the low single digits, with inventory levels projected to return to healthy levels by the end of H1 FY2026 [4][41]. Regional Performance - Revenue declines were observed across all regions, with the Greater China region experiencing the most significant drop of 20% year-over-year [19][25]. - North America, EMEA, and Asia-Pacific regions reported revenue declines of 11%, 10%, and 3% respectively, all better than Bloomberg consensus [11][19]. Brand and Channel Performance - Nike brand revenue declined by 9%, outperforming expectations, while Converse saw an 18% decline, missing consensus [11][19]. - Direct-to-Consumer (DTC) channels saw a 12% decline, with e-commerce down 20%, while physical stores remained stable [11][19]. Inventory and Margin Analysis - Inventory levels are expected to normalize by the end of H1 FY2026, with significant inventory reduction efforts noted in various regions [12][41]. - Gross margin contracted by 190 basis points to 42.7%, primarily due to inventory clearance and increased discounting [11][23]. Investment Recommendations - The report recommends focusing on high-quality suppliers and retailers within the industry, particularly Shenzhou International and Huayi Group, as well as core retailer Tmall, which is expected to benefit from Nike's recovery [4][42].