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Adidas to hit highest profit in three years as Nike lags behind

Adidas to hit highest profit in three years as Nike lags behind

Adidas could see its highest profit margin in three years thanks to the success of its Samba and Gazelle shoes and weaker sales at Nike.

Rival sporting giant Nike forecast a decline in annual sales at the end of last month, ramping up investor concerns over it falling behind competitors, Reuters reported. 

While shares at the brand dropped up to 20%, Adidas shares held strong, indicating investors could see Nike’s decline as an opportunity for its rival.

Tanyard Advisory retail and sporting goods analyst Simon Irwin said: “Nike, in terms of product and message, is very much off its game and Adidas is having a bit of a moment.”

Over the last year, online searches for Adidas Samba have soared globally, overtaking the popular Nike Air Force 1 silhouette in December, according to Google Trends data.

Analysts have forecast Adidas to pull in a profit margin of 51.4% for its second quarter, LSEG data has revealed, hitting its highest point in three years. Additionally, sales for the quarter are predicted to increase 4.5% from the previous year.

Nike is currently facing its worst slump in a decade. Earlier this year it unveiled plans to cut 1,600 roles as it looks to make £1.6bn in cost savings over the next three years on the back of softer sales.

When making the announcement to staff about job cuts, Nike chief executive John Donahoe – who replaced its much-lauded boss Mark Parker in 2022 – admitted: ”We are not currently performing at our best, and I ultimately hold myself and my leadership team accountable.”

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