Which brands own the most iconic sneaker lines?
Nike Inc (NYSE:NKE) and Adidas AG (ETR:ADSGN) dominate the market for iconic sneaker lines, outpacing other sportswear brands by a significant margin.
Both companies continue to rely on their longstanding, recognizable silhouettes to generate sales, with Adidas (OTC:ADDYY) showing a strong performance recently.
According to Morgan Stanley analysts, Adidas’ top-line growth has been strong, with the company reporting an impressive 15.8% organic sales growth in the quarter ending June 2024. This is better than competitors like Nike, which reported flat growth, and Puma SE (ETR:PUMG), which grew by just 2.1%.
In contrast to earlier quarters, where Adidas’ growth was slightly lower, the recent surge highlights the brand’s ability to capitalize on key trends, particularly the popularity of its “terrace” sneakers.
The “terrace” trend—largely driven by iconic models like the Samba, Gazelle, and Spezial—has been a key driver of Adidas’ momentum. According to Morgan Stanley, the sale of these models could rise to 20 million pairs in 2024, up from 7 million in 2023, contributing to 40% of the company’s underlying growth this year.
However, there are concerns that the trend may have peaked in the second quarter of 2024, with a slowdown in online search interest according to Google (NASDAQ:GOOGL) Trends data.
Despite these concerns, Adidas’ wholesale sales for the third quarter of 2024 are expected to accelerate by 25% year-on-year, up from 17% in the second quarter. Channel checks by Morgan Stanley also indicate that sales of “terrace” models remain strong, especially in Europe, where the trend began before expanding to the U.S. and Asia.
The report also points out that Adidas has historically struggled to maintain the life cycle of its key franchises compared to Nike, which has kept models like the Air Force 1 relevant for years.
However, under the leadership of CEO Bjorn Gulden, who joined in January 2023, Adidas appears more focused on improving this aspect. The brand has adopted strategies to extend the product life cycle, such as launching limited-edition collaborations and injecting freshness into existing lines with new colors and twists.