Adidas is bouncing back after a tough few years; Nike isn’t
The three-stripes company has finally recovered from a painful breakup with Ye.
Adidas has been all in on its turnaround, with new CEO Bjørn Gulden, appointed in 2023, working quickly to reverse the 75-year-old company’s fortunes. So far, it’s going well.
Thanks to continued demand for its famous Samba shoes, coupled with a strong festive period, the “brand with the three stripes” reported better-than-expected profits in Q4 2024, with the company’s shares now up ~10% in the last week.
Samba mentality
Booming demand for its retro sneakers — like the 2023 “shoe of the year” Samba, which was so popular that the group had to delay product launches at one point so demand wouldn’t “overheat” last year — has swelled the company’s bottom line. The German sportswear group raked in an operating profit of €57 million ($60 million) in Q4, surprising analysts who were forecasting a loss.
The result represents a full circle moment for the brand, which has had a tumultuous few years after a very public breakup with rapper Ye (formerly known as Kanye West) in 2022, whose Yeezy brand of shoes had made billions for Adidas. Indeed, Adidas shares had dropped by more than 60% since the start of 2022 at their worst, a fall they have since recovered from in full. Rival Nike hasn’t been so lucky.
Indeed, Nike is on its own turnaround plan under newly appointed CEO Elliott Hill. Having spent more than three decades at the iconic sports brand, Hill now helms a company facing a very different landscape to the one that Phil Knight, Nike’s founder, navigated.
Long gone are the days when Nike was the plucky upstart. The goliath of the industry is struggling to get rid of its inventory of once high-performing products like Dunk and Air Force 1s, and newcomers like On Running and Hoka are nipping at its heels. Furthermore, now one of its oldest rivals, which was plagued with similar levels of inventory pileup over the last three years, has gotten its mojo back. Indeed, Adidas has finally cleared out its $1.3 billion worth of Yeezy stock, and the company’s shares are all the better for it — Adidas shares have risen around 56% over the past year, way outperforming Nike’s 27% plunge.
