Nike And adidas - Hooped By Tariffs

2025-05-11 04:37:36 ET

Summary

• adidas has outperformed Nike recently in total returns, despite both facing macroeconomic challenges and potential tariff impacts.
• Nike's heavy reliance on Asian manufacturing exposes it to significant tariff risks, threatening up to 95% of its profits by one estimate.
• adidas benefits from a diversified manufacturing base, including Mexico, reducing its tariff exposure and positioning it better in the U.S. market.
• Valuation favors Nike as it is cheaper, but adidas shows stronger recent performance and better management turnaround, making it a close race.
• It’s all about the tariffs in the short term.

This is a follow-up to an article that I wrote back in December comparing Nike and Adidas.

At the time, I put the two sportswear brands head to head, and picked adidas ( ADDYY ) (ADDDF) as the winner over Nike ( NKE ). My logic was that while Nike was the undisputed segment king, adidas had been through challenging times and was in the early stages of a turnaround. I’d encourage readers to read the original article linked above....

Read the full article on Seeking Alpha

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