Nike is facing stiff competition from Adidas and Under Armour—and it’s losing share in active apparel and footwear as a result.
“Adidas’ resurgence, Under Armour’s basketball gains and the weak U.S. athletic apparel environment remain headwinds for Nike,” Morgan Stanley analysts wrote in a note to investors this week, Business Insider reported.
Despite Forbes crowning Nike the most valuable apparel brand in the world earlier this year, the analysts pointed out that its earnings per share growth has hit a wall. Not to mention, sales have slowed and inventory levels are rising, meaning that Nike’s mission to meet $50 billion in annual sales by the end of fiscal 2020 seems impossible.
Add to this the fact that Adidas and Under Armour shares rose more than Nike’s did during the Olympics—Nike is actually the worst performing Dow stock in 2016—and things aren’t looking too good for the Beaverton, Oregon-based brand.
That being said, Adidas and Under Armour both have a long way to go before their revenues reach Nike heights. The brand hit total revenue of more than $30 billion in fiscal 2015. By comparison, Adidas pulled in $18 billion and Under Armour made just under $4 billion.
But both brands are making Nike sweat. Adidas sales surged 21 percent in its most recent quarter, versus the same period a year earlier, while Under Armour sales soared 28 percent in the three months ended June 30. Nike, meanwhile, only recorded a 6 percent increase in sales in its most recent quarter.
Attention now turns to Sept. 27, when Nike will release the results of Q1 2017. Wells Fargo analysts are expecting the company to cut its full-year guidance, after a poor start to the back-to-school season.
François Girbaud shares with Rivet why he believes fit and function mean more to denim than ever and why he’s eager for newness.Read more
Nike launched Nike Circular Innovation Challenge, a two-part contest that challenges participants to turn grind waste materials into new products or propose innovative material-recovery solutions for footwear recycling.Read more
Nike is shifting its leadership following alleged internal conflict, J.Jill's CEO Paula Bennett is retiring, plus Hugo Boss extended its CEO contract.Read more
Adelante Shoe Co. aims to make footwear shopping more transparent by connecting craftsmen and consumers from point of sale to shoe delivery.Read more
So what's really going on with the retail apocalypse? It really depends on which retailers you're talking about, according to new research from Deloitte.Read more
Following up on its merger this month with the American Fiber Manufacturers, the National Council of Textile Organizations has launched Textiles in the News, a new website promoting the U.S. textile industry.Read more
The challenging retail environment has store executives re-evaluating every aspect of their businesses and Shop.org's “The State of Retailing Online” report highlights retailers' new directions and the areas they say still need improvement.Read more