Adidas' bet on fashion and athleisure is paying off big time in key markets including the U.S., where the German sports apparel maker has been making real progress much to the dismay of Nike, which seems at risk of losing market share at home.
North America was Adidas' main growth locomotive in the first quarter of the year as sales rose 31 percent in the region, followed by greater China where sales advanced by 30 percent. Nike, on the other hand, lagged behind its arch rival in America, with revenue growth of just 3 percent. Adidas' significant progress in North America could be attributed to its aggressive push into retro and "athleisure" fashions that are so in vogue right now. However, one weak spot for Adidas was Russia, where lackluster performance forced the company to close almost one in 10 stores and is widely expected to miss its 10 percent growth target in the country.
"We need to be humble about where we are in the U.S. Our target is to build sustainable brand loyalty. We are coming from a very different basis than our larger competitor," Adidas CEO Kasper Rorsted told reporters.
All things considered, Adidas is well-positioned for growth internationally, especially in North America where its 11 percent share of the U.S. athletic footwear market has much more room to grow. To maintain its momentum, the company plans more investments in the U.S., is aiming to boost online sales to $4.4 billion by 2020 and speed up its supply chain. This past quarter, Adidas saw online revenue jump 53 percent.