As mentioned in an article published earlier, Nike failed to make proper strategic decisions which cost the firm $200 billion in terms of loss.
The stock of the firm hit a 12-year low due to the strategy of going entirely online, taking products off the shelves from retail stores and shopping malls, as well as the lack of innovation.

In this article, we will discuss the biggest competitor of the company Nike - Adidas.
While Nike suffers its losses, Adidas dominates the market.
China has become the main indicator of such a dominance, and this country was the place where Nike suffered its greatest losses.
To give an idea about the extent: Nike experienced eight consecutive quarters of loss of sales in China.
Adidas, on the contrary, demonstrated outstanding stability showing growth for 13 consecutive quarters in China.
In other words, while Americans are losing clients due to the boycott and ineffective marketing, Germans are redefining their collections according to the current trends and snatching the market share.
Moreover, in the second quarter of 2026 the company reported record-breaking sales for €6.74 billion (+14%) with a gross margin above 52%.

Nevertheless, regardless of all of these positive numbers, Adidas' share prices have undergone an abrupt decrease in late July (decreasing 16%) despite the record revenue per quarter.
The most likely explanation for this phenomenon was the worries among investors regarding the lower-than-expected earnings per share (EPS). The fact is that the firm "burned through" an additional €212 million on advertising caused by promotion during the World Cup."

The next reason for the fall in Adidas' share prices, mentioned in a CNBC article, is related to macroeconomic factors and US tariffs. Specifically, the company warned investors of possible negative effects from US trade tariffs and currency fluctuations, which might cost Adidas €400 million. Despite the success of the company in China, US-China trade disputes and tariffs will be difficult for a European brand to handle.

The third issue was related to personnel changes at Adidas. Birgit Kretschmer became a new Chief Financial Officer ( CFO ) in the place of Harm Ohlmeyer who has been heading the financial part of Adidas' business operations for close to three decades. (I would like to mention in particular a story of this person who was one of the most experienced managers in Europe, spent 28 years of his life at Adidas and navigated the company's finances through its most difficult periods.) These changes came at a time when the marketing expenses were quite high. For Kretschmer it will be difficult to find the balance between expensive marketing campaigns and profits from capital. In any big company the personnel change is accompanied by uncertainty. And this leads to an important question: will the new CFO manage to cut costs and capitalize on the company's achievements in China? The last problem was reputational, and geopolitics had played the same role here as in my previous paper. According to a recent Simply Wall St analysis, ADS stock suffered another blow, with the price dropping by 9.5% within one month due to the reputation crisis.
This time, the reason for the scandal was a campaign promoting a new product range called “Single Shoe” that involved an IDF veteran as its main actor.
It provoked an online protest and calls to boycott Adidas' products in the Arab world, forcing the company to apologize officially.
As a matter of fact, this example is a good introduction to another topic I am going to discuss in my future articles, namely, “cancel culture.”

According to estimates of the international financial community, the fair value of the company should be about €201-€208.

As the current price level stands at about €140-€145, there is a possibility for upside growth of up to 46%, and the recent decline in the price level due to marketing expenditures is considered as a good entry point.

It seems that although there are some drawbacks, the current share price level of the company at about P/E 19-20x is a good one for the company that gains market share from Nike.

As the short-term decline in the share price level caused by World Cup marketing expenditure provides investors with a good discount to enter the market, Wall Street estimates the fair value of ADS shares at about €201-€208, implying upside growth potential of up to 40%.

Thanks so much for reading