Adidas, founded in 1949, is currently one of the most popular clothing brands. Going up against huge competitors such as Nike, the largest sports apparel company in the world, has left the company out of the spotlight. However, in the past few years, Adidas has done an incredible job innovating and is now putting up an even more impressive fight. This directly relates to their significant rise in share price over the last few years.
Currently, Adidas has a market cap of 43.3 billion, 2 years prior they had a market cap of 13.7 billion.
2017 full years sales were 24 Billion, 3 years prior they were 17.845 Billion. Adidas has p/e ratio of 26.36.
What’s working for Adidas?
Through the past few years, the popularity of the Adidas shoes has grown exponentially. Adidas has created countless numbers of new innovative shoes that are changing the sneaker game. Shoes such as NMD, Ultra Boost, Futurecraft Yeezy, Human Race etc. are playing a huge role in growing the popularity of Adidas shoes. There is such a large demand for some models of these shoes that they not only sell out immediately but also resell for over retail prices. The great demand for these specific shoes has a huge impact on the entire company as it boosts their brand and reputation. When the general public sees these specific Adidas products reselling way over their original retail prices, hype around the entire Adidas brand is greatly increased. This leads to more demand for all Adidas products which evidently increased their sales.
Our View: The increasing popularity of Adidas shoes has the potential to migrate into all of their other types of clothing. This poses a huge threat to Nike and other competitors. The brand is just as cool if not cooler than any of its competitors which has proven to be extremely important in today’s day and age.
The other day during class I looked down at my Adidas Ultra Boosts, then I looked at the kid’s shoes next to me and saw he also had Adidas on. I kept going around the table looking at people’s shoes, there were 6 Adidas and 1 pair of Nikes. A few years ago, if I were at a table, it would have been most likely the other way around. Something is changing……
What are your thoughts on Adidas? Let us know in the comments below!
Disclaimer: Do not invest your own money without doing your own research, our content is not meant to convince you to buy or sell a stock, but simply to share ideas and unique viewpoints.