Adidas
Adidas is defying all the trends.
- Adidas keeps growing in North America, and saw a 31% increase in sales in the third quarter earnings it announced on Thursday.
- While Nike and Under Armour stumble, Adidas keeps surging ahead with its ambitious North American "over-investment."
- Adidas head of North America credits Adidas' success to maintaining a close relationship with the customer, and catering to their needs closely.
Adidas is still red hot in North America.
In its most recent earnings, released Thursday, Adidas reported sales up 31% in North America year over year. That follows a string of quarters with earnings growth in the high-twenties to low-thirties.
Contrast that with Adidas' two biggest competitors in the US, and the difference couldn't get any starker. In its most recent earnings, Nike reported a sales decrease of 3% in North America. Under Armour, which Adidas passed earlier this year to become the second-largest sportswear seller in the US, reported a decline of just over 12% in their latest earnings.
Both Nike and Under Armour blame the tough conditions in the athletic market today, but Adidas' success throw a bit of a wrench in that narrative.
How does Adidas keep growing in spite of customers growing more choosy? There's no secret, according to the head of Adidas North America, Mark King, who says the brand's strategy is now coming into the focus and everything is clicking into place.
As he's been reiterating since Adidas began its run, it's all about getting the right product in front of the right customer at the right time.
As King said in March, "we're focusing on what the consumer wants."
That includes the athletic-inspired lifestyle running sneakers that customers are eating up, instead of focusing on the clunky basketball shoes that Nike and Under Armour had made their bread and butter. Adidas's hottest shoes, like Ultra Boost, Alpha Boost, and Pure Boost, have driven much of the growth, along with retro looks like the Stan Smith.
King says Adidas has doubled market share in all categories, and is especially hot in the running category.
But King says the brand continues to be hot, customers are developing a relationship not just with the shoe franchises, but with the brand itself. Adidas task now, King says, is to manage those shoe franchises to achieve sustainable growth.
King's focus now is on continuing that growth, which he says is "real."
Another piece of the puzzle King says is to "follow the customer" online and treat ecommerce with the respect it deserves. As more customers go online to do their shopping, that has lead to Adidas to create a brand new shopping app for smartphones to fill that demand.