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Investing.com -- Adidas is continuing to outperform in China’s athletic wear market, even as overall industry trends remain sluggish, according to UBS.
In a note summarizing an expert call held on May 30, UBS said, “Adidas maintained its strong momentum from Q1, with only a ‘slightly smaller’ outperformance relative to the market.”
The expert cited by UBS noted that Adidas’ recent performance was “slightly below” expectations but attributed that to delays in new product arrivals, suggesting the brand’s underlying momentum remains solid.
Despite a more promotional market environment, Adidas (OTC:ADDYY) managed to reduce the depth of its own promotions by 30 to 60 basis points.
UBS said this strategic move “should support its gross margin.” The company’s discipline stands in contrast to competitors, especially Nike (NYSE:NKE), which has increased promotional activity more significantly.
Looking ahead, the expert expects Adidas to post low- to mid-double-digit growth in 2025, up from previous high-single-digit to low-double-digit expectations.
UBS now forecasts 2025 currency-adjusted sales growth for Adidas in Greater China of 14%, compared with the consensus of 12%.
Industrywide, conditions are said to remain challenging. UBS noted that “the athletic wear sales growth rates in China during April and May likely rose +LSD% y/y and came in below expectations.”
Consumers are spending cautiously due to macroeconomic uncertainty and are shifting more purchases online, where pricing is typically more promotional.
While Nike continues to face inventory pressures and struggles with product innovation, UBS said Adidas’ relative strength has persisted.