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Nike vs Adidas - Financial Analysis
- 1. Financial Comparison TEAM 7 JoshMilitante, Clint Seader, Michelle Lugo, Shamim Imani
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- 4. Sportswear SUPERSTARS Footwear Adidas Divestitures: Rockport TaylorMade AdamsGolf Ashworth CCM Hockey
- 5. REVENUE FY17 ($millions)25,461 34,350 YOY GROWTH 14.8% 6.1%
- 8. 2015 → 2016→ 2017 Revenue €16,915 9.3% €18,483 14.8% €21,218 Gross Margin 48.3% 1.0% 49.2% 1.2% 50.4% Net Income Cont Ops €686 58% €1,081 25% €1,354 ✓ ✓ ✓
- 12. London Los Angeles New York Paris Shanghai Tokyo London LosAngeles New York Paris Shanghai Tokyo Beijing Berlin Mexico City Barcelona Seoul Milan URBANCITIESDRIVINGGROWTH
- 13. Collaborate Locally Empower LocalTeams Local Custom Factory 3D Rapid Prototyping Local Manufacturing Strategy Collaborate Locally Empower Local Teams Create Products for Region Manufacturing/Distribution Strategy
- 14. Stores in US144 209 Stores World Wide 2500 851
- 15. Nike (May 31,2017) Adidas (Dec 31, 2017) Actual % Actual % Total Revenue 34,350 6.1% YOY 25,461 14.8% YOY Gross Profit 15,312 44.6% 12,845 50.4% Operating EXP 10,563 30.8% 10,340 40.6% EBITDA 5,465 15.9% 2,934 11.5% EBIT 4,749 13.8% 2,504 9.8% Net Income 4,240 12.3% 1,316 5.2% Diluted EPS ($) 2.51 16.2% YOY 7.9 25.2% YOY All values in $USD Millions
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Editor's Notes
- #2 Josh We are Team 7 and here to present a financial comparison between Nike and Adidas intro team in order: Josh (industry overview), Clint (Adidas Strategy “Creating the New” and YOY Fin Performance), Michelle (Nike “Triple Double” Strategy - Innovation, Speed and Direct2Customer) Shamim (Closer - take us through the numbers via side by side comparison)
- #3 Josh - This is the industry breakdown of where Nike and Adidas plays - Footwear (largest share), Apparel (mid) and Hardware (small) (i.e. sports equipment) Globally, it is over $280B USD industry (revenue opportunity in the market North America being the biggest region @ almost $109B (almost 40%!! @ 38.5%) followed by Asia-Pacific and Western Europe
- #4 Josh - Industry Growth - from 2016 projected through 2021 Where is the industry experiencing the most growth? Apparel growing 3.5% Footwear is growing roughly 5%; almost 2x
- #5 Josh - Focusing on footwear category, Nike and Adidas are the top 2 Taking roughly ⅓ of the market share Adidas is increasing their investment in the footwear category; divested companies: Rockport, Adams Golf and Taylormade Ashworth, CCM Hockey
- #6 Josh Across the 3 categories, revenue growth is mainly in footwear Stacked up, clearly Nike is the leader today, BUT YOY growth is significant for Adidas; they are closing the gap with Nike
- #7 Strategic Business Plan from 2015 - 2020
- #8 CREATING THE NEW Culture eats strategy for breakfast Adidas promotes a culture of creativity, collaboration and confidence as being a key enabler to Create the New. In order to create Brand Desire, Adidas has three areas of focus of Speed, Cities and Open Source. Open Source: Collaboration-based innovation with athletes consumers & creative partners Cities: Most of the world lives in cities and accounts for 80% of global GDP. Adidas sees cities shaping global trends and consumer perception and buying decisions. Their big objective is to push into the US. (Adidas Grew 24% in North America while Nike grew 3% in NA) Speed: fresh and desirable products where and when they want them. anticipate what the consumer wants and react accordingly. 3d printing in local factories. (manifest itself as reduced inventory risk.) Speedfactory in Germany and in Atlanta Georgia.
- #9 Pushing harder for growth. Their actual % of revenue is actually still less than half of what Nike is experiencing. (5.2% Adidas and Nike around 12.3%) Now I’ll turn it over to Michelle to take a closer look at Nike’s strategy.
- #10 Michelle - strategic focus begining Make more custom products focused on local influenc to --why they spend more on endorsements
- #11 Michelle - goals, strategies, results Style has not been focus - answering new trend for style and sport Express Lane - getting product from concept to the customer better, similar to what Adidas is doing instead of SPEEDFACTORY - they’re calling Express Lane Maximse profit - maximize feedback from customers and putting (27% of their revenue is coming direct from consumer and grew 16% --versus that 6% company overall revnue) Goals are significant more focused on using captializaed versus ADidas looking to grow
- #12 Michelle - goals, strategies, results Revenue - if you look at 2013, 2014, 2015 their looking good, but things slow down from 2016 to 2017
- #13 Shamim
- #14 Shamim
- #15 Shamim
- #17 Shamim
- #19 Josh pulse the class Nike and Adidas play in major arenas from sports equipment, apparel and footwear for our discussion, we will focus on the footwear division