- Company ComparisonAdidas & Nike are two huge competitors and have been for a lot of years. The brand Adidas is less costly; on the converse, Nike is having slightly higher price rates than Adidas. Nike Shoes Vs. Other Brands: What Makes Them Better . VERDICT: Both companies pay out relatively low-yield dividends. 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. However, we do note an unfortunate deceleration of the dividend growth rate in recent years, with a 10-year growth rate of 13.5%, a 5-year growth rate of 12.6%, a 3-year growth rate of 11.1% and a 1-year growth rate of 10.3%. This is not good considering how low the yield is. reports that the company is forced to save $130 million in costs through cutting jobs, inventories and facilities. Adidas:22/25+ 3. In addition to its namesake brand, the company also owns Reebok, 8.33% of the Bayern Munich football team, and Australian fitness technology company Runtastic. The competition has clearly gone beyond sneakers battle; it has now expanded to lifestyle and athleisure. Despite the market dominating presence of Nike, Adidas has been able to strengthen its position in the global markets. 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.. (By comparison, Adidas’ market cap is $55 billion, and Under Armour’s is $10 billion.) If Adidas or Nike will be highly successful in their chosen paths to success, only time can tell. 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. The case with Under Armour just shows how unpredictable the shoe market is. The companies I chose are Adidas and Nike. The company’s debt burden is sustainable. The truth is that Nike’s reputation did not appear out of thin air. 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 Compare NIKE vs adidas BETA See how working at NIKE vs. adidas compares on a variety of workplace factors. VERDICT: Both companies have sustainable debt levels. It adopts different and Competetive pricing startegy than Adidas, it is based on the basis of premium segment as target customers. Which stock should you buy and hold for the long term? Disclaimer: This is not financial advice. 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? Nike is a U.S based brand of sportswear while Adidas is a German-based company. Both admit that the market is fickle and the demand depends on the performance of new releases. Adidas’ stock price increased 415.5% in 10 years, which represents an average annual growth rate of 41.55%. While Nike’s total Free Cash Flow is higher in dollar amounts, Adidas’s Free Cash Flow is increasing at an much faster rate. For example, if you’re a women’s size 8 for Adidas, your foot is 9.7-inches long. Nike is taking the quality route, and Adidas is ramping up productions. Should investors be worried? Moreover, Adidas’s Stan Smith and Puma’s Clyde shoes are performing beyond average in the market. Nike is taking the quality route, and Adidas is ramping up productions. WINNER: ADIDAS. 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. 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. However, the company lost its grip recently. Nike and Adidas have also been the top sponsors in the sports industry. Even though no company compares to Nike’s endorsers and marketing strategy, Adidas’ products are provided the consumer with a better experience. Adidas uses Boost technology for the sole of its shoes. Ecommerce product pages: where to place 30 elements and why 2. VERDICT: Both companies are generating massive Free Cash Flow. Logo of Nike is Swoosh while that of Adidas is 3 Stripes. Nike’s annual dividend payout is $0.98 per share and the payout ratio is 39.3%, which is reasonable. The brand has built several sources of competitive advantage which include technology, marketing, supply chain as well as product design and quality. The media mileage also surged. Nike as brand has high premium, so the price of its products is high than adidas. Both companies have solid balance sheets but Adidas appears in [very] slightly better financial shape. WINNER: ADIDAS. The stock reached its all time high of $316.05 on January 15th, 2020, before plunging 33.8%. The battle for supremacy between Nike and Adidas has been going on since time immemorial. Both are great brands, but there are a number of reasons Adidas is the clear winner. Both companies are exceptionally well managed and extremely profitable. The disparity is more evident with half sizes. 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. Nike has dominated the market for a long time. However, through it all, there are always popular brands of products that maintain their status on a global scale. Now, they don’t even have to go to resellers since the stores still have stocks in them. On the other hand, since the demand for Adidas is currently high, CFO Harm Ohlmeyer reveals that they plan to win more market share in North America. Adidas runs bigger than Nike by up to 5 millimeters. However, Adidas’ dividend yield and growth rate are higher but Nike has a more reliable history of consistent dividend growth. Nike is definitely one of those brands. In fact, its 2019 EBITDA of $5.49 billion more than cover the $3.4 billion of long term debt. Adidas now has the upper hand over Nike in terms of sales due to the popularity of Yeezys, Ultra Boosts, and NMDs. While competitors such as Puma, Under Armor and New Balance are well established and growing, they have failed to break up this duopoly. Historically, the yield has always been very low and has not surpassed 1.5% in the past 10 years. 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). The company also operates its own stores, supplies millions of merchants worldwide, and sponsors top athletes and sports teams. Nike’s markets are more on domestic but have expanded internationally; Adidas is well known around the world but is primarily focused on Europe. Adidas’ annual dividend payout if $4.33 and the payout ratio is 38.6%. (Source). She also covers the intersection of media and technology, and delves into interesting topics on entertainment. She is currently based in New York. These factors helped propel the sales of Adidas. Nike promotes its products by sponsorship agreements with celebrity athletes, professional teams and college athletic teams. 1. Right now, Adidas owns about 60 percent of the market due to the popularity of Yeezys and Ultra Boost and NMDs as well. According to Business Insider, their strategies on how to get to the top are vastly different. Adidas marketing strategies, meanwhile, are completely formulaic and not compelling. WINNER: TIE. StockX CEO Josh Luber says Adidas only owned about one percent of the market two years ago. However, when it comes to quality, Nike comes out best, not just topping Adidas (+39 vs. +36), but the sports clothing sector as a whole. WINNER: NIKE. Before, once the customers missed out on an exclusive release, their only chance to cop a pair is through resellers. Nike was founded and established in 1964 while Adidas was founded and established in 1948. Adidas is a German company founded in 1924 by Adolf Dassler that designs and manufactures shoes, clothing and accessories. I chose these two brands mainly because they have both played a pretty significant role in my purchase history. A Project Report on A COMPARATIVE MARKET STUDY: NIKE VS ADIDAS. However, Nike’s stockholder equity has significantly decreased since 2016 whereas Adidas’ has increased. Summary of Nike’s assets and liabilities: In sum: Nike’s financial situation is relatively strong. Nike’s dividend yield of 1.18% is low. Nike outsource its’ products from Taiwan … The brand value of Nike has increased year-on-year since 2010 and reached around 34.4 billion U.S. dollars in 2020. This is evident when you look at the size chart Nike … Do you own research before investing in any asset. Adidas’ current dividend yield of 1.87% is higher than Nike’s. Frankly, not so much: Nike’s is growing its revenues, sustaining high margins and generating profits. Since its creation in 1971, Nike started and continues to be one of the most valuable sports brands on the market. Winning also matters. Nike is synonymous with elite athletics as they sponsor hundreds of high-profile athletes and sports teams around the world. That was before they released the Yeezy, which proved to be a. for them. Nike is currently on +47, ahead of its German rival on +41. Sometimes she also writes about the cannabis industry, in particular CBD and hemp. From a financial perspective, Nike is much larger than Adidas but, in recent years, Adidas has accelerated its growth. It reduced the number of retail partners from as high as 30,000 to just 40. Both Adidas and Nike have taken significant steps to reduce their environmental impact. 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’s target markets are basketball and running; Adidas’ focus is more on soccer and tennis. Right now, Adidas owns about 60 percent of the market due to the popularity of Yeezys and Ultra Boost and NMDs as well. ADIDAS’ current P/E ratio is 21.54. Nike vs Adidas market rivalry. More businesses are investing in company culture—here's why. We do note a considerable increase in liabilities and a significant decrease in stockholder equity. When Adidas-sponsored teams such as the German Football National Team won the World Cup, sales of jerseys, kits, and shoes increased. Probably this is the reason, Nike … Nike is the most valuable sports brand in the world, especially in North America. However, while Adidas’ gross margin is better than Nike’s, Nike’s net profit margin is much higher. Nike. Nike is known to be more comfortable 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. Although past performance does not guarantee similar future performance, it does provide some indication of what to expect. There is some evidence it is a distinct possibility. Nike (NYSE: NKE) and Adidas (ETR: ADS) are the two most recognizable sports brands in the world. With superstar athletes in almost every sport donning the Swoosh logo, it was once the must-have in sports apparel and shoe market. Moreover, Adidas’s Stan Smith and Puma’s Clyde shoes are performing beyond average in the market. Key Differences between Adidas and Nike. 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). Nike’s Free Cash Flow is increasing at an impressive pace: Its 2019 FCF of $4.7 billion is up 144.9% since 2016. 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 is an older brand as compare to Nike by the date of establishment. The media mileage also surged. Winner: Adidas. Sizing Them Up. USA TODAY reports that the company is forced to save $130 million in costs through cutting jobs, inventories and facilities. This means that the stocks price is trading at 30 times earnings, which is considered high. How have Nike and Adidas stock performed in the past? There are other well-known and high-quality brands available in the market, but for now let’s take a deeper look at these two. The same size on Nike tallies up to 9.62 inches, about a millimeter smaller. However, Adidas’ stock has generated greater capital gains returns and trades at a lower P/E ratio. As compared to Adidas, the price of products of Nike are high. Submitted By 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. 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. Adidas vs Nike - Which Brand is Better in 2020? Anne Kings is a reporter for the financial sector, often tackling Wall Street and shareholders' interests. With its originality, quality, and price; Adidas beats out Nike in a landslide. When Adidas-sponsored teams such as the German Football National Team won the World Cup, sales of jerseys, kits, and shoes increased. If Nike continues to grow the dividend, it can can reach dividend aristocrat status in less then 10 years. However, “cash is king” and Nike generates twice the total cash flow Adidas does. Unfortunately, Under Armour is struggling recently. A new survey from Canaccord Genuity among 1,400+ athletic apparel consumers finds Nike is way out front in innovation, fashion and purchase intent as compared with Adidas… The entry of Under Armour was also a factor. It... Are we on the cusp of a runaway move? 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. The clash between two of the world’s biggest athletic shoe brands is no secret. Despite proposing a low dividend yield, Nike has increased its dividend for 18 consecutive years. 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. Nike produces its Jordan shoes in a very limited number only. WINNER: ADIDAS. But is this warranted? In addition to marketing hundreds of products under its own name, the company owns plethora of other well known brands, including but not limited to Air Jordan, Air Force 1, Air Max, Nike Skateboarding, Nike CR7, Converse and Hurley International. For Nike, North America is also the main target because of the global revenue generated in 2017. 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. In order to answer this question, an exhaustive comparative analysis is necessary. By continuing to use our website, you accept and give your consent to our practices as described in the following: our revised. That was before they released the Yeezy, which proved to be a game changer for them. The plus point with Nike is that they have strong marketing and sponsorship agreements to back it. 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? Nike and Adidas carries manufactures basically the same products. Nike And Adidas Sustainable Initiatives. 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. Despite adidas and Nike being forerunners for world-class shoes, their sizing differences can be a real hassle when shopping online. Nike is focusing on quality while Adidas wants to increase production. Nike Shoe Quality. By comparing employers on employee ratings, salaries, reviews, pros/cons, job openings and more, you'll feel one step ahead of the rest. Since the problem was rooted in overproduction, Nike CEO Matt Parker says the company is set to undergo a massive transformation. On the other hand, many consider adidas’ shoes to be more stylish. Which strategy will prove to be effective in the end? These factors helped propel the sales of Adidas. Login. However, Nike has much higher margins and generates greater cash flow. 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. Adidas’ Free Cash Flow is also increasing very rapidly: Its 2019 FCF of $2.1 billion is up 202.8% since 2016. Nike has dominated the market for a long time. Summary of Adidas’ assets and liabilities: In sum: Adidas’ financial situation is very strong. Contrarily Nike mostly uses rubber for the soles of the shoes. Further, the total long term debt of $1.5 billion is entirely covered by it 2019 EBITDA of $3.9 billion. NIKE’s current P/E ratio is 30.80. Their battle for supremacy has defined the modern era and looks set to continue for the next decade and more. However, the long term debt increased 62% since 2016 and the company’s debt to equity ratio has increased to 2.00 from 1.34 in 2016. Nike (NYSE: NKE) and Adidas (ETR: ADS) are the two most recognizable sports brands in the world. 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’s pretty much ahead when it comes to athlete sponsorships; Adidas is behind the competition. As a result of the recent dip in stock price, the current yield is higher than the 4-year average, indicating the stock price may be slightly undervalued. Their strategy which was once highly-effective eventually led to its downfall. The company’s debt burden is sustainable. Furthermore, Nike’s returns are significantly higher than Adidas’. 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%. While the growth rate is erratic, with wild swings in dividend increases, it is consistently superior to Nike’s. VERDICT: Over the past 10 years, both stocks have performed strongly. Unfortunately, Under Armour is struggling recently. The stock reached its all time high of $104.58 on January 21st, 2020, before plunging 20.41% in February. Nike’s stock price has increased 350% in 10 years, which represents an average annual growth rate of 35%. 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. Adidas is much smaller than Nike, but what makes Adidas different is that it has a better sense of what its customers are looking for and works on it. Policing Tech Giants: No Harm, No Foul, No Social Media? WINNER: NIKE. , their strategies on how to get to the top are vastly different. All salaries and reviews are posted by employees working at NIKE vs. adidas. About: the Adidas company was started by 'Adolf Dassler' & his elder brother 'Rudolf Dassler' in yeat 1924 under the name 'Dassler Brothers Shoe Factory'. Meghan Markle: Adaptogens now have royal support, Aigis Bank, the fintech credit institute for SMEs was founded. Nike didn’t make it to the top by sheer luck. 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. Nike is base in the US and Adidas is base out of Germany. This surged the interest and demand despite the high price tag. In the US, Nike has a clearer advantage over its rival in terms of Impression score among all respondents. also matters. Born2Invest uses cookies in order to improve your experience and make further customizations to how we present our content. A digital product strategy entails defining the value that you will be creating in a tangible and succinct way. Let me know if this helped. In sum: Nike’s dividend yield is low but the payout is reliable. Nevertheless, the company’s total assets outweigh its liabilities. The reason I chose these two is because they 're both popular brand names around the world. Nike is much larger but Adidas is growing at a faster rate. Adidas is still much smaller than Nike: Adidas brought in $5.3 billion in 2017 compared with Nike's $15.2 billion. It is the largest sportswear company in Europe, employing over 57 thousand people and the second largest in the world, after Nike.