USA TODAY reports that the company is forced to save $130 million in costs through cutting jobs, inventories and facilities. When Adidas-sponsored teams such as the German Football National Team won the World Cup, sales of jerseys, kits, and shoes increased. NIKE’s current P/E ratio is 30.80. I will analyze the following aspects of both companies: Nike, founded in 1964 by Bill Bowerman and Phil Knight, takes its name from Nike, the Greek Goddess of victory. - Company ComparisonAdidas & Nike are two huge competitors and have been for a lot of years. The entry of Under Armour was also a factor. Despite adidas and Nike being forerunners for world-class shoes, their sizing differences can be a real hassle when shopping online. However, Adidas’ stock has generated greater capital gains returns and trades at a lower P/E ratio. However, the company lost its grip recently. Your choice to invest in one or the other will depend on your personal brand preference and the criteria you favor when choosing a stock. Nike was founded and established in 1964 while Adidas was founded and established in 1948. Adidas uses Boost technology for the sole of its shoes. That was before they released the Yeezy, which proved to be a game changer for them. However, there is a red flag: the dividend has been cut in the past at least twice since 2008 which means that the company is not really crisis proof. However, Adidas’ dividend yield and growth rate are higher but Nike has a more reliable history of consistent dividend growth. With the recent dip in the interest of retail stores in the U.S., just how do these two companies plan to bring back consumer engagement in their products? A Project Report on A COMPARATIVE MARKET STUDY: NIKE VS ADIDAS. Do you own research before investing in any asset. , their strategies on how to get to the top are vastly different. Nike is focusing on quality while Adidas wants to increase production. This means that the stock is currently trading at 21.5 times its earnings, which is reasonable. This surged the interest and demand despite the high price tag. Further, the total long term debt of $1.5 billion is entirely covered by it 2019 EBITDA of $3.9 billion. Nike and Adidas carries manufactures basically the same products. Nike Shoes Vs. Other Brands: What Makes Them Better . Nike is a U.S based brand of sportswear while Adidas is a German-based company. In sum: Nike’s dividend yield is low but the payout is reliable. Unfortunately, Under Armour is struggling recently. Under Armour is a little off the pace but only needs a few tweaks to close the gap. On the other hand, many consider adidas’ shoes to be more stylish. This means that the stocks price is trading at 30 times earnings, which is considered high. For example, if you’re a women’s size 8 for Adidas, your foot is 9.7-inches long. Adidas’ annual dividend payout if $4.33 and the payout ratio is 38.6%. Over the years, the company has built up quite a reputation for itself, with millions of loyal customers lauding the athletic giants for the great quality of their shoes. Totting up the scores, it’s pretty much a shared win for Adidas and Nike on the criteria we looked at. Even though no company compares to Nike’s endorsers and marketing strategy, Adidas’ products are provided the consumer with a better experience. Nike didn’t make it to the top by sheer luck. Their battle for supremacy has defined the modern era and looks set to continue for the next decade and more. All salaries and reviews are posted by employees working at NIKE vs. adidas. WINNER: ADIDAS. Contrarily Nike mostly uses rubber for the soles of the shoes. A digital product strategy entails defining the value that you will be creating in a tangible and succinct way. The media mileage also surged. Nike’s target markets are basketball and running; Adidas’ focus is more on soccer and tennis. Under Armour:18.5/25+ For more on this topic, see: 1. With superstar athletes in almost every sport donning the Swoosh logo, it was once the must-have in sports apparel and shoe market. In the US, Nike has a clearer advantage over its rival in terms of Impression score among all respondents. Both started using sustainable materials, sustainable production, and sustainable recycling. WINNER: NIKE. Nike, Reebok and Adidas offer athletic apparel to professional athletics. In order to answer this question, an exhaustive comparative analysis is necessary. Nike has dominated the market for a long time. Adidas size 8 and Nike size 8 are more or less the same, but the Superstar is known to run a bit bigger and has a thinner upper material composition and tongue. The same size on Nike tallies up to 9.62 inches, about a millimeter smaller. Adidas:22/25+ 3. Moreover, Adidas’s Stan Smith and Puma’s Clyde shoes are performing beyond average in the market. Which strategy will prove to be effective in the end? Sizing Them Up. Since the problem was rooted in overproduction, Nike CEO Matt Parker says the company is set to undergo a massive transformation. StockX CEO Josh Luber says Adidas only owned about one percent of the market two years ago. Nike is synonymous with elite athletics as they sponsor hundreds of high-profile athletes and sports teams around the world. Nike produces its Jordan shoes in a very limited number only. Under Armour CEO Kevin Plank admitted that they will deliver fresh products and innovation in their offerings to try to stop the bleeding in the next quarters. Nike:21.5/25+ 2. More businesses are investing in company culture—here's why. Thanks largely to the success of endorser Stephen Curry, who was a back-to-back MVP of the NBA and had two championships in the last three years, Under Armour came out of nowhere and gave Nike and Adidas a good scare. Compare NIKE vs adidas BETA See how working at NIKE vs. adidas compares on a variety of workplace factors. Probably this is the reason, Nike … But is this warranted? The brand Adidas is less costly; on the converse, Nike is having slightly higher price rates than Adidas. Policing Tech Giants: No Harm, No Foul, No Social Media? Under Armour CEO Kevin Plank admitted that they will deliver fresh products and innovation in their offerings to try to stop the bleeding in the next quarters. Nike is definitely one of those brands. Nike and Adidas have also been the top sponsors in the sports industry. Their battle for supremacy has defined the modern era … Nike is known to be more comfortable than adidas. Concerning the dividend, Adidas has the slightly higher yield and dividend growth rate but Nike has raised its dividend for the past 18 consecutive years compared to Adidas’ 4. Adidas vs Nike - Which Brand is Better in 2020? She also covers the intersection of media and technology, and delves into interesting topics on entertainment. Adidas dividend growth is strong. The companies I chose are Adidas and Nike. The competition has clearly gone beyond sneakers battle; it has now expanded to lifestyle and athleisure. WINNER: NIKE. VERDICT: Both companies pay out relatively low-yield dividends. Right now, Adidas owns about 60 percent of the market due to the popularity of Yeezys and Ultra Boost and NMDs as well. In sum: NIKE’s moat is constituted of its scale (over $34 billion in annual sales), brand intangible asset (the company controls 50% of the American market and 19% of the Chinese market), key sponsorships and pricing power (through premium innovation). When Adidas-sponsored teams such as the German Football National Team won the World Cup, sales of jerseys, kits, and shoes increased. The reason I chose these two is because they 're both popular brand names around the world. This is evident when you look at the size chart Nike … Comparison Between Nike And Adidas 1679 Words | 7 Pages. How did Namibia Critical Metals stock perform recently? Most cannabis stocks could not make up any more ground in the past week, and perhaps investors are excited in... From your website to your Instagram feed, inclusive marketing can be an integral part of your marketing strategy—but only if... How did cannabis companies perform this past week? The stock reached its all time high of $316.05 on January 15th, 2020, before plunging 33.8%. It... Are we on the cusp of a runaway move? Adidas is a German company founded in 1924 by Adolf Dassler that designs and manufactures shoes, clothing and accessories. Winning also matters. Nike and Adidas do not get along, and their competition to claim the two biggest sneaker markets in the world, the United States and China, has gotten so heated that some have even called their faceoff a war.. StockX CEO Josh Luber says Adidas only owned about one percent of the market two years ago. I chose these two brands mainly because they have both played a pretty significant role in my purchase history. Sub-Saharan soda rush: PepsiCo expands to Africa, For your convenience: How modern retailers like Casey’s General Stores, Inc. (NASDAQ:CASY), Murphy USA Inc. (NYSE:MUSA) TravelCenters of America LLC (NASDAQ:TA) drive their margins, Here are the states with the unfriendliest customers, Here’s how to take the first steps towards debt-free living, You must be logged in to post a comment Despite proposing a low dividend yield, Nike has increased its dividend for 18 consecutive years. Lastly, Adidas’ stock has generated greater capital gains over the past 10 years but is listed on the Frankfurt Stock Exchange whereas Nike stock has the advantage of being listed on the US market. Nike has dominated the market for a long time. (By comparison, Adidas’ market cap is $55 billion, and Under Armour’s is $10 billion.) Nike as brand has high premium, so the price of its products is high than adidas. Nike is currently on +47, ahead of its German rival on +41. She is currently based in New York. The media mileage also surged. COVID-19 : Accelerator for Business Model Innovation in China, Quibi enters the Streaming Wars amid the Quarantine Era, but are they about to disrupt a different…, Facebook’s Mantra Is “Join Us or We’ll Copy You”, Huawei is considering manufacturing smartphones in Brazil, Why Consumer Capitalism is the Real Problem in Fashion Industry, What First-Graders Can Teach Us About Focus In Business And Life, Fake Disruption: 3 Companies That Claimed to Change the Game. According to Business Insider, their strategies on how to get to the top are vastly different. Should investors be worried? Nike’s pretty much ahead when it comes to athlete sponsorships; Adidas is behind the competition. Nike is base in the US and Adidas is base out of Germany. Ecommerce product pages: where to place 30 elements and why 2. If Adidas or Nike will be highly successful in their chosen paths to success, only time can tell. Now, they don’t even have to go to resellers since the stores still have stocks in them. Since its creation in 1971, Nike started and continues to be one of the most valuable sports brands on the market. Nike vs Adidas market rivalry. VERDICT: While Adidas has a long history of innovation, boasts a portfolio of popular brands and has developed key sponsorships with some of the world’s top athletes, Nike’s economic moat is wider and the brand has more appeal. For Nike, North America is also the main target because of the global revenue generated in 2017. The battle for supremacy between Nike and Adidas has been going on since time immemorial. WINNER: ADIDAS. In fact, its 2019 EBITDA of $5.49 billion more than cover the $3.4 billion of long term debt. Which stock should you buy and hold for the long term? Born2Invest uses cookies in order to improve your experience and make further customizations to how we present our content. Analysis of Nike vs. Adidas I have chosen to take a closer look at the companies Nike, and Adidas and how they compare financially with the ultimate goal of being able to identify the “best” stock. However, while Adidas’ gross margin is better than Nike’s, Nike’s net profit margin is much higher. While the growth rate is erratic, with wild swings in dividend increases, it is consistently superior to Nike’s. As compared to Adidas, the price of products of Nike are high. The case with Under Armour just shows how unpredictable the shoe market is. While competitors such as Puma, Under Armor and New Balance are well established and growing, they have failed to break up this duopoly. That being said, a temporary dividend cut is sometimes necessary to free up the extra cash needed to invest and ensure the business’ long term survival. Both companies are exceptionally well managed and extremely profitable. Disclaimer: This is not financial advice. also matters. Furthermore, Nike’s returns are significantly higher than Adidas’. All three companies are involved in shoe wars for the services of professional basketball players, which provide marketability and exposure to massive audiences. Adidas now has the upper hand over Nike in terms of sales due to the popularity of Yeezys, Ultra Boosts, and NMDs. Adidas is still much smaller than Nike: Adidas brought in $5.3 billion in 2017 compared with Nike's $15.2 billion. These factors helped propel the sales of Adidas. Sometimes she also writes about the cannabis industry, in particular CBD and hemp. Right now, Adidas owns about 60 percent of the market due to the popularity of Yeezys and Ultra Boost and NMDs as well. Nike is taking the quality route, and Adidas is ramping up productions. Nevertheless, the company’s total assets outweigh its liabilities. While they are selling similar products, Nike products are more expensive than Adidas because all Nike brand has high and advance technology. The truth is that Nike’s reputation did not appear out of thin air. It is the largest sportswear company in Europe, employing over 57 thousand people and the second largest in the world, after Nike. The world is constantly changing, and there are disparities. Moreover, Adidas’s Stan Smith and Puma’s Clyde shoes are performing beyond average in the market. Logo of Nike is Swoosh while that of Adidas is 3 Stripes. We do note a considerable increase in liabilities and a significant decrease in stockholder equity. The competition has clearly gone beyond sneakers battle; it has now expanded to lifestyle and athleisure. Key Differences between Adidas and Nike. Nike is taking the quality route, and Adidas is ramping up productions. By comparing employers on employee ratings, salaries, reviews, pros/cons, job openings and more, you'll feel one step ahead of the rest. The clash between two of the world’s biggest athletic shoe brands is no secret. However, “cash is king” and Nike generates twice the total cash flow Adidas does. The company’s debt burden is sustainable. The plus point with Nike is that they have strong marketing and sponsorship agreements to back it. It reduced the number of retail partners from as high as 30,000 to just 40. Nike is taking the quality route, and Adidas is ramping up productions. In sum: Adidas’ moat is constituted by its deep branded portfolio, intangible assets (long history of product innovation) and key sponsorships (Adidas recently pried James Harden away from Nike). Nike Shoe Quality. Nike’s stock price has increased 350% in 10 years, which represents an average annual growth rate of 35%. Adidas marketing strategies, meanwhile, are completely formulaic and not compelling. Beats’ activation around the opening game led to 50m views, compared to Guinness’ 13m; something both Nike and Adidas will be looking to and waiting for as the opening game draws closer.” Adidas’ Facebook followership has grown twice as fast as that of Nike in 2016 with much higher engagement rates driven largely by its content. While Nike’s total Free Cash Flow is higher in dollar amounts, Adidas’s Free Cash Flow is increasing at an much faster rate. This is not good considering how low the yield is. Evidently, Nike’s management is very competent at generating returns: Margins are also robust, although net margins are quite low: Adidas’ returns are good but significantly lower than Nike’s: VERDICT: Both companies are outperforming relative to their industry average. 1. Apparel. From a financial perspective, Nike is much larger than Adidas but, in recent years, Adidas has accelerated its growth. In terms of revenue growth, Adidas footwear has added $5.8 billion since 2015 growing at an average rate of 17.6% whereas Nike footwear has only added $4.3 billion at an average rate of 6.8%. The company manufactures sportswear and equipment, operates its own retail stores and employs more than 73 thousand people worldwide. Adidas’ stock price increased 415.5% in 10 years, which represents an average annual growth rate of 41.55%. All of Nike’s brands generated $34.4 billion in total revenue in the last financial year (running to the end of May 2017), while Adidas reported annual revenue of 19.2 billion euros in the last financial year, which matched the calendar year of 2017 (all charts below are based on these financial years). Despite the market dominating presence of Nike, Adidas has been able to strengthen its position in the global markets. Nike outsource its’ products from Taiwan … Both Adidas and Nike have taken significant steps to reduce their environmental impact. 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