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Adidas gains market share as Nike ( NKE ) struggles

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US a key battleground for German brand

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Adidas signs US athletes, partners with LA brand

By Helen Reid

LONDON, Feb 28 (Reuters) - Whether Adidas can

win more American shoppers from market leader Nike ( NKE ) will be key

to its continued success this year, investors and analysts said,

as the German brand looks for new sources of growth beyond its

Samba and Gazelle sneakers.

Uncertainty over whether consumer demand in China will

recover has driven many brands, including in the luxury sector,

to focus more on U.S. shoppers as a growth driver for 2025.

Chief Executive Bjorn Gulden has turned Adidas around since

the brand cut ties with rapper Ye and scrapped its lucrative

Yeezy sneaker line in October 2022. Shares in Adidas

have risen 160% since his appointment was announced the

following month.

Investors will expect Gulden to explain how Adidas can keep

gaining market share from Nike ( NKE ) while also fending off

newer sportswear brands like On Running and Hoka when

it reports full-year results on March 5.

Nike's ( NKE ) share of the global sportswear market fell to 14.1%

last year from 15.2% in 2023, according to GlobalData. Adidas'

market share increased to 8.9% from 8.2%, and other gainers

included New Balance, On Running, and Hoka.

UBS analysts said European brands have historically

struggled to compete in the United States, and North America has

been a laggard for Adidas recently, though they see that

changing.

The Germany company's North American sales, which were down

7% in the third quarter from the previous year, have not fully

recovered from the end of its Yeezy line, which was popular in

the United States.

Overall, Adidas sales grew 19% in the quarter to December

31, and 12% over 2024 as a whole, while Nike's ( NKE ) sales were down

9% in its latest quarter ending November 30 last year.

"The difference between Adidas and Nike's ( NKE ) growth is huge

right now," said Thomas Jökel, portfolio manager at Union

Investment, which holds shares in Adidas.

Adidas' overall sales should keep growing by at least 10%

annually as long as Nike ( NKE ) is struggling, said Jökel, adding that

the United States and broader North American market is a key

battleground.

Adidas has been targeting U.S. consumers, recently launching

an apparel and shoe collaboration it said was inspired by

"collegiate Americana" with Los Angeles-based label Sporty &

Rich, and a new Superstar 92 sneaker with American musician and

designer Pharrell Williams.

Its recent athlete signings include Women's NBA player Satou

Sabally and college football player Travis Hunter.

"Adidas is making strong market share gains in the U.S. in

direct-to-consumer and sporting goods retail, driven by the

Terrace franchise (Samba, Gazelle) which has seen strong

sell-through at full price through the holiday season," said

Aneesha Sherman, analyst at Bernstein.