adidas AG

Nike will stop selling through partner-operated online storefronts in China starting January 2027, a move Bernstein analysts say should lift the company's China operating margins by 200 basis points to 24% in fiscal 2027 but will also erase roughly $1 billion in revenue as the wholesale online channel is wound down. The channel represents a high-teens percentage of Nike's China business, and its elimination is expected to cause a low-teens constant-currency decline in China for fiscal 2027, dragging total company growth by 2 percentage points. Nike's digital presence in China will thereafter be limited to its direct web and app channels and official flagship stores on Tmall, JD.com, and Douyin, a shift aimed at curbing gray-market resellers and deep discounting that management says has hurt brand perception. Bernstein cut its Nike price target to $68 from $72 and lowered fiscal 2027 earnings-per-share estimate to $1.96 from $2.10, while maintaining an outperform rating. The broker named Adidas as the biggest near-term beneficiary, as partners like Topsports and Pou Sheng will need to replace lost Nike online volume, and also sees domestic brands Anta and Li Ning gaining at lower price points.

German sportswear giant Adidas has lifted its full-year revenue outlook. On a currency-neutral basis, it now expects growth of 9 to 10 percent year-on-year, up from a previous forecast of a high single-digit increase. Second-quarter revenue rose 14 percent to 6.74 billion euros, beating analyst estimates of 6.63 billion euros, but operating profit grew just 5 percent to 574 million euros, missing the forecast of 623 million euros. Robust demand for the football World Cup and retro-style models boosted revenue, while a 30 percent jump in marketing expenses for World Cup campaigns weighed on profit. The full-year operating profit forecast was kept unchanged at around 2.3 billion euros.

Nike missed a potentially valuable World Cup finale after Spain defeated Argentina on Sunday, with both finalists wearing Adidas kits. Spain and Argentina had previously eliminated Nike-sponsored France and England in the semifinals, giving Adidas a stronger opportunity to benefit from fan demand for Lionel Messi and Lamine Yamal jerseys. Nike had positioned the tournament as an important opportunity to rebuild momentum in soccer under CEO Elliott Hill's renewed focus on sports, but the result may have limited merchandise revenue. The company also faced criticism over shoulder puckering on some jerseys and production delays that prevented certain tournament inventory from reaching retailers on schedule. Nike remains under pressure to recover from slower sales growth, with weakness in China and the Converse brand, while it sees a significant opportunity in women's soccer ahead of next year's Women's World Cup in Brazil.

The second-quarter earnings season shifts into a higher gear this week, with Alphabet headlining a busy slate of results that will test a stock market near record highs. Alphabet is the first of the so-called hyper-scalers to report, and investors will closely watch any changes to its capital spending plans amid booming AI investment. Other major companies set to report include Tesla, Intel, and American Express, while overall S&P 500 earnings are expected to rise 25.7% from a year ago, according to LSEG IBES data. The European Central Bank is likely to pause its policy rate on Thursday after hiking last month, with all focus on clues about a potential September hike. In sports, Spain defeated Argentina 1-0 in extra time to win the World Cup, benefiting Adidas, which sponsored both finalists, while Nike saw none of its 12 teams reach the final.

Adidas and GLO Brands announced ADIDAS PRO WORK, a certified safety footwear line targeting logistics, manufacturing, and transportation workers, with European retail prices between €100 and €150 and availability from August through selected retailers and distributors. The line features women-specific fits and ergonomic technologies, extending adidas beyond traditional sportswear into the professional personal protective equipment segment. The move could add a more regulation-driven, less fashion-dependent revenue stream, though it is not expected to be a major near-term catalyst compared with execution in core footwear and apparel.

A Discounted Cash Flow analysis suggests adidas shares are trading at a 46.8% discount to an estimated intrinsic value of about €348 per share, based on trailing free cash flow of roughly €221.6 million. However, the stock's current price-to-earnings ratio of 23.6 times sits above both the modelled fair ratio of 18.8 times and the broader luxury industry average of 17.4 times, indicating a premium on earnings. The mixed valuation picture leaves investors weighing cash flow potential against competitive pressures and margin execution risks, with community narratives split between a bull case seeing 28% upside and a bear case implying 19% overvaluation.

Nike shares have fallen to their lowest level in more than 11 years, trading at prices last seen during the Obama presidency, according to Yahoo Finance AlphaSpace data. The stock is down 36% this year and 43% over the past 12 months. The decline comes ahead of Nike's fiscal fourth quarter earnings report on Tuesday, where the company is expected to show sales down 2% to 4% and gross profit margins lower by 25 to 75 basis points. The company faces a challenging restructuring under CEO Elliott Hill, increased competition from Adidas and On Holding, and continued pressure in its China business, where sales fell 10% in the prior quarter. Stifel analyst Peter McGoldrick warned that a dominant market position may not translate to value creation without a shift in consumer preference or a reinvigoration of innovation, and said he is not ready to call a bottom on the shares.

Adidas has entered the European personal protective equipment market with a new safety footwear collection developed with GLO Brands, while also launching a cross-industry partnership with mobile game Brawl Stars. The ADIDAS PRO WORK range targets logistics, manufacturing, and transportation workers with features such as women-specific fits, ESD certification, and metal-free construction, priced between €100 and €150. The Brawl Stars collaboration combines in-game content with real-world brand activations, including in-game skins and junior collections, extending Adidas' reach into digital fandom and youth culture. These initiatives come as Adidas' stock last closed at €181.7, up 3.9% over the past week but down 7.3% over the past year and 39.5% over five years.

Nike has appointed David M. Denton as its incoming Chief Financial Officer. Denton, who has held senior finance roles at Pfizer and Lowe's, will succeed current CFO Matthew Friend, with a planned overlap through early September to provide continuity. The leadership change comes as Nike continues a multiyear turnaround that has been slower than hoped, facing execution risk, margin pressure, and competition from adidas and Puma. Denton's background in global finance and complex restructurings could influence cost control, capital allocation, and long-term investment priorities as the company works through direct-to-consumer expansion, tariff pressures, and supply chain resets. Investors will watch for any adjustments to medium-term margin and cash flow targets, as well as commentary on wholesale resets and regional trends in upcoming earnings calls.

The global sports eyewear market is projected to grow from USD 9.73 billion in 2025 to USD 16.59 billion by 2033, at a compound annual growth rate of 6.9%. Increased participation in fitness activities and outdoor sports such as cycling, running, trekking, and water sports is driving demand for specialized eyewear that enhances comfort, durability, and visual clarity. Rising awareness of UV protection and eye health is also pushing consumers toward products with features like UV400 protection and polarized lenses, while performance-oriented innovations such as tinted lenses, anti-fog coatings, and interchangeable lens systems are capturing interest. The report segments the market by product, sports type, end user, price tier, distribution channel, and region, and profiles key companies including EssilorLuxottica, Safilo Group, Luxottica Group, Nike, and Adidas.

Nike shares have fallen nearly 65% over the past five years, yet the stock does not appear attractively valued given ongoing sales challenges. The company’s fiscal third-quarter revenue was flat year over year, but after removing foreign-currency effects, revenue actually declined 3%. Management missteps, including a shift toward direct-to-consumer sales that alienated wholesale partners, and a lack of innovative products have allowed competitors like Adidas, On Holding, and Deckers Outdoor’s Hoka brand to take market share. New CEO Elliott Hill, who returned in October 2024, is refocusing on sports, but top-line growth has yet to materialize. With a price-to-earnings ratio of 30, only slightly below the S&P 500’s multiple of 32, the stock may be a value trap until there is evidence of a sustained turnaround.

Panmure Liberum analysts warned that simple tournament-themed stock baskets tied to the 2026 World Cup could mislead investors, even as Adidas, Entain, and Carlsberg draw fresh attention. Strategists Joachim Klement and Francisca Reis reviewed nine World Cups since 1990 and found the strongest performers often had little obvious link to soccer, including Sagax AB, Man Group Plc, and Fresnillo Plc. They described many World Cup baskets as noise dressed up as thematic investing. Instead, the analysts pointed to stocks that may look attractive beyond the tournament because of valuation, profitability, and growth, highlighting Adidas with a forward price-to-earnings ratio of around 18, about 40% below its 10-year average, and expected annual earnings growth of more than 15% over the next three years. Entain, which owns more than 35 betting and gaming brands including Ladbrokes, Bwin, and BetMGM, trades at about 10 times forward earnings with double-digit annual profit growth estimated over the next three years. Both Adidas and Entain are seeing positive earnings revisions, possibly helped by the World Cup's familiarity effect, though some optimism may fade after the tournament, creating a risk of modest downgrades. For a more defensive play, the analysts highlighted Carlsberg A/S, trading at about 13 times forward earnings, around 20% below its 10-year average, with earnings expected to grow roughly 10% a year.