Adidas Revenue H1 2015 and H1 2016,by Region (in million Euros) Source:https://www.statista.com/The Adidas Group’s net Salesworldwide from 2000-2015(in million Euros) Source:https://www.statista.
com/Brand Value of the Sports CompanyNike from 2012-2016(in billion USD) Source: https://www.statista.com/ Brand Value of Adidas Previous Close: $78.90 Volume: 26.56K Market Cap: $31.61B Enterprise Value: $19.
74B Last Quarterly Filing: 30-Sep-16 Beta (5yr): 1.03 Shares Outstanding: 400.62M Revenue: $20.
79B Gross Margin: 46.25% Net Margin: 5.31% EPS: $2.
69 Price-to-Earnings: $2.58 Price-to-Book: 9.41 EV/EBITDA: 15.
63 Source:http://marketrealist.com/Analyzing the Prospects of Nike’sGeographic Segmentso Nike in NorthAmerica§ Most of Nike’s (NKE) incremental revenue was recorded in its North America market, Nike’slargest geographical segment. Nike derived ~44% of its revenue from NorthAmerica in 1H15. In contrast, peers LululemonAthletica (LULU) and Under Armour (UA) derive over 90% of their revenues from the North American market.Nike’s reported North American revenue grew 13.8% year-over-year to $6.
8billion. § Revenuegains were a result of retail expansion in thecompany’s direct-to-consumer (or DTC) channel, 10% store comps growth in1H15, and higher e-commerce sales. Nike’smarket share also expanded in key product categories. Ø Overseas marketso Nike’sperformance outside North America in 1H15 was mixed. Revenue showedabove-average growth in Western Europe and Greater China—both key markets forNike. Western Europe and Greater China contributed 4% and 2%, respectively, tothe overall growth in revenue.Western Europe is Nike’s second-largest segment,accounting for 19.
7% of revenue. Reported revenue grew at 27.4%year-over-year to $3.0 billion in 1H15. Nike has been expanding its retailfootprint rapidly in Western Europe. Growth in Western Europe was spurred byhigher DTC sales, which grew 40% year-over-year.
Nike also recorded compsstore growth of 17% and higher e-commerce sales.o China is anotherkey market for Nike. Greater China revenues grew 19.4% year-over-year to$1.4 billion in 1H15.
DTC growth was strong, with comp sales growing at 28% in1H15 and higher e-commerce sales. But all was not sunshine in China. Thecompany experienced declines in men’s training, action sports, and soccer.
o Despite therelatively healthy growth shown by the world’s #1 sports gear company inoverseas markets, macro fundamentals are undergoing a change. We’ll discussthese changes in parts 8 to 10 of this series.o Nike (NKE) is partof the select 30-stock Dow Jones Industrial Average and the broadermarket–tracking S&P 500 Index. ETFs like the SPDR Dow Jones IndustrialAverage ETF (DIA), the SPDRS&P 500 ETF (SPY), and the SPDRConsumer Discretionary Select Sector ETF (XLY) provideexposure to Nike (NKE). DIA, SPY, andXLY invest 3.5%, 0.4%, and 2.9% of their portfolio holdings in Nike (NKE).
Market TrendsMarket Trends of NikeØ Nike’s initial productadvertising strategy of using professional athletes for increasing demand wasthrough word of mouth and also provides the good publicity.Ø Nike changes its targetmarket from teenagers to younger consumers due to intense competition withAdidas and Reebok and also to expand its target market.Ø During the time of recessionconsumers was willing to pay on that brand because Nike having superiorquality, style and reliability. Nike generates the higher revenue from itscompetitors because of its Slogan “Just Do It” and strong product. (Deng, 2009)Ø It also introduces the digital sports and e-commerce in its recent yearsdue to changes in technology trends.
Ø It introduces the Nike+running sensor in collaboration with Apple Inc. and other products like fuelbrand personalize the hi- tech experience for the customers. (Soni,2014)Ø Nike has been launched itstechnologically advance shoe models from time to time through innovativeadvertisements , celebrity endorsements , successful association and eventsponsorships.
Ø Company still faces many challenges in this changing fashion trends and itssale is falling in the shoes category and increased competition. After thesechanges though it is trying its best to create the good position in the marketand make products according to fashion trends (Aid, 2005).Market Trends of AdidasERIC LIEDTKE, EXECUTIVE BOARD MEMBER RESPONSIBLEFOR GLOBAL BRANDS Quotes the following: “We are closest to every consumer with ourunique brand portfolio. In the future, we will not only talk to and talkwith our consumers. We will be the first sports company that invites athletes,consumers and partners to be part of its brands. We will open up so that theycan co-create the future together with us.”As a Group we have taken three clear strategic choices that we want tofocus on: Speed, Cities and Open Source.
Our People will bring them to life.?’Creating the New’is the headline for our next five-year strategic business plan. ‘Creating theNew’ is the attitude that leads us into the future – an exciting future,because our industry is growing in size and scope and will continue to do so.In fact, the sporting goods industry is growing faster than most otherindustries, including consumer electronics.
This trend will continue. Sport is central to every culture and society and iscore to an individual’s health and happiness. All of this is very good news tous because our core competency is sport. Throughsport, we have the power to change lives. We work every day to inspire and enable people to harnessthe power of sport in their lives. We also translate our competence in sportsinto streetwear and fashion because sport is an attitude and a lifestyle.
Everythingwe do is rooted in sports. Atthe very heart of ‘Creating the New’ are our brands. Our brands are whatconnect us with our consumers; therefore, the success of our brands defines thesuccess of our business.
Our core brands – adidas, Reebok and TaylorMade – havestrong identities in sport. adidas appeals to athletes, Reebok focuses on thefitness consumer and TaylorMade is all about the golfer. Through ourunique portfolio of leading sports brands, we cater for the needs anddesires of more consumers than any of our competitors. With ‘Creating the New’,we will get closer to them than ever before. To achieve that, our plan is basedon three strategic choices:Ø Speed: We will become the first true fast sportscompany: Fast in satisfying consumer needs, fast in internal decision-making.
Ø Cities: We have identified six key cities in whichwe want to grow share of mind, share of market and share of trend.Ø Open source: We will be the first sports brand thatinvites athletes, consumers and partners to be part of our brands.’Creatingthe New’ is an ambitious, yet realistic plan that provides the layout for ouraccelerated growth, both on the top and on the bottom line between nowand 2020.MAKING IT SUCCESSFUL WILL BE A TRUE TEAM EFFORT. WE AREHERE TO WIN!