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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