Adidas needs to retreat from America. Its market share will only get smaller as it is pounded by Nike Inc. (NYSE: NKE), Under Armour Inc. (NYSE: UA) and niche brands. Its most recent quarterly numbers were terrible, particularly when compared its larger competition.
In the most recently reported quarter, the Adidas North America segment posted revenue of €591 million. Its operating loss was 1.5%. It did not post a loss in any of its other five geographic segments. In Under Armour’s last reported quarter, its revenue was $805 million, on which it made $12 million in net income. Each was dwarfed by Nike, which posted revenue of $7.5 billion and net income of $791 million in the most recently reported period.
There is no horse race for first place, which means the battle is to be a relatively strong second.
Under Armour is making by far the more convincing bid that it will continue to take market share in the sportswear industry in the United States. It has among its athletes NBA All-Star Stephen Curry and top NBA prospect Emmanuel Mudiay. The list of athletes sponsored by Under Armour is growing. Adidas can claim two baseball players, neither whom are nationally known: Justin Upton, who has poor numbers so far this year, and B.J. Upton, who barely has played this year.
If Adidas is not willing to buy a lot more athletes, it may as well pack it bags and go home.
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