raised its full-year operating profit forecast to €2.5 billion (about $2.8 billion). Adidas’ official earnings report is not due to be released until next week, but the preliminary figures stand in stark contrast to Nike’s most recent report. Nike reported a four per cent year-over-year revenue decline to $11.2 billion. Despite Nike CEO Elliott Hill’s ongoing efforts to revive the brand’s image, and the recent appointment of LVMH heir Alexandre Arnault to the Nike board, the American retailer is unlikely to see a significant profit increase in the coming quarters. This could give Adidas a further advantage in the American retail market. On October 20, Cristina Fernández, managing director and senior research analyst at Telsey Advisory Group, said, “The company is executing well, and its growth and profitability remain strong, resulting in significant market share gains and outperformance relative to competitors, particularly Nike.” Similarly, Neil Saunders, managing director at GlobalData, told Inside Retail, “The results from Adidas stand in marked contrast to those from Nike. They show a brand that, despite some softness in the global sportswear market, continues to win sales growth and share through a strong lifestyle position.” How Adidas is gaining traction in the activewear market While Nike remains the market leader with an estimated $46.4 billion in annual revenue, Adidas is not too far behind. The second-biggest player generates an estimated $29.4 billion in annual revenue and is expanding at a rapid pace. Saunders attributed Adidas’s upward trajectory to its clear brand identity and strong connection with consumers. “As a brand, Adidas also seems very cohesive and has a strong point of view. This is different from Nike, which continues to feel fragmented and uncertain about its purpose,” said Saunders. Saunders noted that while some footwear franchises are not operating as strongly as Sambas, Adidas has been able to counterbalance this by leaning into apparel. Its lifestyle and retro collections have proved appealing to customers, demonstrating how a balanced product portfolio can help a brand navigate an uncertain market. Scott Benedict, founder and CEO of Benedict Enterprises, attributed Adidas’ recent success to several factors, including the effective alignment of product assortment with evolving consumer preferences, merchandising discipline and a balanced approach to distribution. In terms of product assortment, Benedict said, “The continued popularity of its lifestyle footwear franchises, including Samba, Gazelle, and Spezial, demonstrates the value of identifying cultural trends and translating them into commercially successful assortments. Importantly, Adidas has complemented that lifestyle momentum with its performance-oriented products, creating multiple opportunities to engage consumers.” Importantly, Benedict noted that Adidas has not relied solely on aggressive promotions to generate sales. Instead, the company has focused on rebuilding product desirability, strengthening its assortment and supporting healthier full-price selling. “In today’s retail environment, generating demand through product relevance is considerably more sustainable than continually stimulating demand through discounts,” he said. Finally, Benedict noted that Adidas has placed a renewed emphasis on wholesale partnerships, alongside its direct-to-consumer business. This is vital as consumers don’t necessarily organize their shopping journeys around a brand’s preferred distribution strategy; they expect to discover and purchase products wherever it is most convenient. “Adidas’ approach reinforces the importance of meeting consumers across multiple channels rather than attempting to control every interaction,” he said. Against this backdrop, Benedict noted that Nike’s recent challenges illustrate the risks associated with becoming overly dependent on established product franchises, shifting distribution strategies too aggressively and allowing competitors to capture emerging consumer preferences. “Adidas has capitalized on opportunities created by those challenges, although Nike remains a formidable competitor with substantial brand equity and innovation capabilities. For other retailers, I believe the broader lesson is that sustainable growth begins with merchandising fundamentals, not simply marketing investment or channel expansion,” he said. The takeaway for retailers is that brand strength is not a permanent competitive advantage. It must be continually earned through product relevance, consumer trust and consistent execution. “Adidas’ recent performance is a useful reminder that even in a mature, highly competitive category, retailers and brands can generate meaningful growth when they get those fundamentals right,” Benedict said. Adidas is giving consumers meaningful reasons to buy the product As Barney Stacher, CEO of consultancy Retail OCD, told Inside Retail, “Nostalgia can get a shopper through the door. You still need something new for them to buy.” Adidas is keeping its brand interesting by focusing on recognizable staples like Sambas while cultivating new products and expanding other areas of the business. This can be seen in Adidas’s second-quarter results. Its performance business grew 39 per cent compared with the previous quarter, led by soccer and running, while apparel grew 35 per cent on a currency-neutral basis. These figures suggest a business with several growth drivers, rather than one fashionable silhouette carrying the company. Stacher also commended Adidas for its emphasis on local sports teams in recent seasons. He said, “Consumer relevance is often decided much closer to the shop floor than the headquarters conference room. Giving local teams room to influence products and respond to their markets can make a global brand feel more personally relevant.” Retail brand strategist and marketing consultant Bethany Paris Ramsay similarly connected Adidas’s recent success to its ability to diversify its product range without diluting its image, as well as its focus on connecting with consumers at a local level. She explained, “Adidas has described giving markets more influence over products designed for local preferences and culture. From a brand perspective, that allows a global identity to feel relevant in someone’s actual life. Retailers can take something from that: consistency should make a brand recognizable while leaving room for the assortment and experience to reflect the people shopping it.” Ramsay attributed Nike’s recent pressures to relying too heavily on familiar products. “Nike has acknowledged oversupplying its Jordan retro products, even as its performance business continues to grow. An iconic product gives you an enormous advantage, but its history cannot do all the work of maintaining demand. Customers still need freshness, a compelling reason to purchase and confidence that the product is worth its price,” she said. Ramsay also highlighted Adidas’s emphasis on full-price sales. Merchandising and inventory decisions shape brand perception as much as campaigns. When customers repeatedly encounter promotions and discounts, that becomes part of what they learn to expect. “For other retailers, the lesson is to use the attention around a successful product to build demand for the wider business. Give customers a clear reason to explore another category, invest in products that earn that interest and be thoughtful about how much you put into the market. A bestseller should help build the next chapter of the brand,” concluded Ramsay. Further reading: ‘Uphill climb’: Why is Nike’s turnaround still struggling?