Companies and Brands

Nike Crushes Adidas in Global Sales

For all the talk about which athletic gear company has done better at the World Cup, globally, quarter after quarter, Nike Inc. (NYSE: NKE) thrashes primary rival Adidas in global sales.

Nike announced the results for its most recent quarter. Revenue rose 11% to $7.4 billion. Per-share earnings from continuing operations rose 3% to $0.78. Perhaps just as important, worldwide future orders were up 11%.

While Nike would like to argue otherwise, it is still primarily an American company, in terms of revenue sources. North American revenue for the just finished quarter was $3.3 billion, out of the $7.4 billion total. And Western Europe was another $1.3 billion. Nike’s efforts to make progress in the massive market in China have been close to a failure. Revenue there was only $702 million, up 4% when currency changes were backed out.

At Adidas, revenue in the most recent quarter was 3.5 billion euros, or $4.8 billion, down 6%. Nike is clearly winning the worldwide market share war. Despite its effort to resurrect Reebok, its sales dropped 5% to $487 million. This means its primary play in the U.S. market has largely failed. Most of the ugliness was in North America, Nike’s stronghold. Adidas Group sales in the region dropped a full 20%.

In response to the North American failure, Adidas Group CEO Herbert Hainer said “the biggest obstacle to success has been and still is execution.” Put another way, as CEO his plans for the region have been an utter failure.

The athletic apparel business gets played out on several levels. Soccer is only one of them, and as the World Cup ends, a decreasing factor. Adidas has had not had enough success across a broad series of products, which includes running and golf gear, and only modest success in the entirely critical American market.

With another very successful quarter behind it, Nike has shown again that Adidas is barely competition at all.

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