Why Adidas Is Winning the Athletic Sneaker Game

Adidas NMD R1 PK "Tri-Color"
The Adidas NMD R1 PK "Tri-Color" in white features a socklike upper, full-length Boost cushioning, and red, black, and blue branding.
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Adidas has found the key to turning the athletic industry tables in its favor.

Less than two years ago, experts were questioning whether the brand — which had clearly lost its luster among North American consumers — had enough momentum to keep its head above water in the near term. Now, the company is being hailed the biggest threat to Nike’s athletic market dominance in recent years.

And while some have tried to complicate the reasons behind Adidas’ headline-making revival, sports industry analyst Matt Powell said it comes down to one thing.

Adidas’ current success [comes down to] product,” Powell said. “Adidas focused on making shoes the kids want, and it worked.”

Indeed, the marketing mantra “product is king” is holding true for Adidas, but B. Riley & Co. LLC analyst Jeff Van Sinderen said the company has also checked a lot of critical boxes when it comes to the quality and depth of its offerings.

Adidas has excellent, authentic, classic product [such as] the Stan Smith and the Superstar,” Van Sinderen said. “The brand has also developed great new fashion and performance oriented product that is resonating really well.

Meanwhile, current fashion trends favor retro products, which sits perfectly within Adidas’ wheelhouse, and adds to its ability to dominate the athletic market across the board.

Newly minted Adidas Group CEO Kasper Rorsted said today following the release of the company’s third quarter earnings — which saw the firm post blockbuster numbers — that he has no plans of slowing the current growth pace.

We will make sure that we remain a growth company, and at the same time deliver significant top-and-bottom-line improvements,” said Rorsted, who took over from former Adidas CEO Herbert Hainer on Oct. 1, during the firm’s third-quarter conference call. “We need to win with the consumer with the most innovative products and also the most engaging experiences. But we also at the same time need to manage our business in a digital manner to ensure sustainable success.”

Rorsted said he would aim to drive a digital transformation within the company and also forge ahead with Adidas’ North American turnaround.

Adidas brand sales advanced 20 percent year-over-year in the third quarter, fueled by double-digit sales increases in the Sport Performance, Adidas Originals and Adidas Neo lines.