Nike already dominates the sneaker industry, and it’s beating its competition by an even wider margin now.
“Nike continues to regain share from Adidas in Running across the US,” Jefferies analyst Randal Konik wrote in a note out to clients. The “running” category is synonymous with the broader sneaker category. Nike is currently number one in market share, with Adidas a distant second, according to data found by WedBush analysts in April.
Perhaps the one data point that’s the truest indicator Nike is running away with the market is discounts. “The depth of discount on the sale page at footlocker.eu for Adidas remains at relatively high levels, which is incrementally concerning to us,” Konik wrote.
The average Adidas discount on Konik’s check was 37% off the original price, while Nike’s average discount was 25%. “Adidas’s higher depth of discount relative to Nike is indicative of Adidas peaking,” Konik said.
Social media data shows Nike is a far more favorable brand than Adidas. “Adidas total mentions slowed down slightly,” Konik said.
Product discounts in the retail space can be an ominous sign. Less than a week ago, a nother note from Konik said Victoria’s Secret’s discount and promo frenzy in many of its stores reflected that it was losing its luster with customers. “The need to increase promos to drive traffic indicates the consumer is going elsewhere for said products,” he wrote.
Konik has $68 price target for Nike, roughly 8% below its current level. Nike is up 17.5% this year.
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