Adidas Is The Hot Story Of 2016

Leverage Equity Research was one of the first firms to to highlight Adidas turnaround story when everyone else left the company for dead.  Our first article ever was published on Adidas, at a time when there was very little coverage on the company, the stock was trading in the high 30s range.

Check back a little over a year later, Adidas is getting tons of coverage from all the top financial news outlets, the stock is now nearing the 90 range and will soon surpass that target.  All at a time when Nike and Under Armour stock have been stuck in the doldrums.

The athleisure trend has slowed down considerably from a hot 2015, as evidenced by Skechers, Under Armour, and Lululemon’s struggles; Nike is the worst performing stock in the Dow for 2016.  The outlier in the athletic apparel space is Adidas, up a remarkable 85% this year.

Adidas In Fashion

Adidas has become a staple in the fashion world, with consumers opting for more casual athletic styles. Simply put, Adidas is innovating better than its competitors right now and creating a lot of momentum because of it.

“Our adidas business remains on fire across several platforms led by superstar Stan Smith, NMD, Alphabounce and Ultra Boost.”

Shoe retailer Finish Line said its in second quarter earnings call last week.

The brand has gone through a literal overhaul in a short period of time, and the excitement around the Kanye’s partnership with Adidas has really created a lot of positive attention elevating the brands status in fashion. Retail stores are responding and are looking to expand their Adidas shelf space.

Adidas has really altered its strategy in the North American market strategy and it appears to be paying off.   When it comes to casual athletic right now, Adidas is clearly the favorite.

“And while they remain focused on performance, they’ve really I think brought the cool factor to their brand. That’s driving a lot of interest, a lot of demand. “ said Finish Line CEO Sam Sato

Adidas has certainly struggled in the basketball footwear space in the past few years, if the company has make some inroads in clawing back at clear basketball favorite Nike, that could seriously pay some dividends for the worlds 2nd largest athletic apparel brand.

Adidas has shifted to individual player endorsements in the NBA, and signed many top picks in the recent draft. The company has also announced that they will be making a Kanye West basketball shoe likely for their new endorsers, which should create some of the biggest buzz in the NBA in terms of footwear.