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Shares of Nike and Adidas could score at the World Cup
With FIFA projecting at least 5 billion TV viewers, the world's highest profile soccer event is a major opportunity for sports apparel makers marketing their jerseys, boots and other products with teams and individual players.
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Nike footwear worn by Beijing Guoan Football Club players are seen during a training session at the Fengtai stadium in Beijing on April 11, 2021. (AFP/Noel Celis)
As 32 teams compete for the World Cup in Qatar, Adidas and Nike also hope their shares can score.
With FIFA projecting at least 5 billion TV viewers, the world's highest profile soccer event is a major opportunity for sports apparel makers marketing their jerseys, boots and other products with teams and individual players.
Adidas shares lost 6 percent during the month-long 2018 World Cup, when heavily favored Germany, an Adidas team, was knocked out early and the FIFA tournament was won by France, a Nike team. Nike gained 4 percent during the same period, beating the S&P 500's 1 percent gain.
In its quarterly conference call on Nov. 9, Adidas said it expects sales of about 400 euros ($415 million) related to the World Cup, which would amount to around 2 percent of additional annual revenue.
Mexico jerseys are among Adidas' current best sellers, an Adidas spokesperson said.
Nike did not immediately respond to a request for comment about the importance of the World Cup on its sales.
While soccer-related merchandise accounts for a fraction of both Adidas and Nike's overall businesses, hype around the World Cup and team jerseys can provide a halo effect driving sales of other kinds of merchandise, said Wedbush analyst Tom Nikic.
"If somebody in Germany buys a World Cup jersey, do they also buy a new pair shoes? Or if an Adidas sponsored team wins the whole thing, in the euphoria of winning the World Cup, do people buy more jerseys than they otherwise would have? That's where you can see some variability," Nikic said.
Nike is providing jerseys for 13 teams in this World Cup, including Brazil, France and the United States, overtaking Adidas as the leader in World Cup jerseys. Seven teams are kitted out in Adidas jerseys, including powerhouses Germany, Spain and Argentina.
Six countries are playing in Puma jerseys, with New Balance and other companies making up the remainder.
Nearly a week into the World Cup, Nike teams have accumulated 22 points, while Adidas-clad teams have accumulated 11 points and teams wearing Puma jerseys have won eight points.
So far during the tournament, shares of Nike have risen under 1 percent, while Adidas and Puma are each down 3.8 percent and 3.0 percent respectively.
