Injured by Adidas and Reebok, Nike brand orders are not ideal

Global sports brand leader Nike Inc. recently said that due to strong sales in the domestic market, the company’s second-quarter earnings increased by 15%. However, the combined challenges of competitors Adidas and Reebok have caused the company's global orders to be less than satisfactory, and the stock price has also fallen by 3%.

Nike said that the company’s second-quarter earnings reached US$301 million, a 15% increase compared with the same period last year’s surplus of US$261 million, and its earnings per share was 11 cents higher than the analyst’s average forecast. In addition, Nike’s second-quarter sales also increased by 10% from the same period last year to $3.5 billion, exceeding market analysts’ estimates of $3.473 billion. The company said that the strong growth in sales and profitability of the Nike brand business in the United States and the Americas resulted in better-than-expected earnings results.

But this summer, Adidas, the world's second-largest sports brand, merged with Reebok, the third-largest brand, to jointly attack Nike, adding a lot of pressure to Nike. At present, Nike's market in Europe and Japan is not ideal. Although Nike’s orders increased by 2.5% over the same period of last year, it dropped by 6% in the European market of Adidas’s hometown. John Shanley, an analyst at the US financial company Susquehanna Financial Group, said that for Nike, the international market has become more and more important.

The advent of the World Cup in Germany next year gave Nike a lot of confidence. Nike hopes to promote the company’s sales in Europe through the World Cup. However, Nike admitted that due to the strength of the European traditional sports brand, competition in the European market will be fierce. In addition, Nike plans to launch a new shoe in Japan in January next year to deal with the slow-growing Japanese market. Nike also said it will increase investment in the Asian market. William Perez, CEO of Nike, also believes that China is a good market and hopes to promote the Nike brand in China's second-tier cities.