Professor golfer Sergio Garcia finally won a major championship at the 2017 Masters, culminating in a sudden-death playoff against English professional Justin Rose. This year’s Masters tournament marked the 37-year-old Spaniard’s 73rd attempt to take home a major, where it all came down to a 5-foot putt for him to beat out the Brit.
Ultimately, Garcia broke his chain of compounding failures, freeing himself from the label as “one of the best who choked under pressure.” As the crowd in Augusta cheered his name, the Spaniard enjoyed the revelation that he had indeed made a comeback.
German Sportswear Maker Emerges
Coincidentally, the same narrative can be used to describe the seemingly miraculous revival of Garcia’s major sponsor, German-based sportswear company Adidas AG (ADDYY). Trading at a price of $94.06 on Monday afternoon, shares of the global athletic apparel and footwear manufacturer reflect a 20% gain year to date (YTD) and a 60% year-over-year (YOY) incline, cooling off slightly from all-time highs reached in mid-March.
Investors have rallied behind Adidas’ sudden gain on rivals Nike Inc. (NKE) and Under Armour Inc. (UAA). While in the past, the U.S. sportswear leaders have overshadowed their European counterpart, various indicators point to a changing tide. In March, Adidas’ new Chief Executive Officer (CEO) Kasper Rorsted lifted the company’s revenue and profit forecasts, along with presenting a new growth strategy focused on building out the firm’s North American business, forming a strong company culture and doubling down on ecommerce. Adidas' upbeat outlook followed a strong full year 2016, in which sales grew 18% and net profit increased 41%.
Rorsted’ initiative, dubbed Creating the New, targets between 10% and 12% revenue growth over the five-year period and a 20% to 22% yearly profit gain on average until 2020. In contrast, Nike and Under Armour have both seen their shares dip on lackluster quarterly reports, with 2017 guidance failing to impress the Street. (See also: Analysts at Odds Over Under Armour's Prospects.)
Piper Jaffray: Nike No Longer America’s Favorite
After news came out that Adidas’ Superstar sneaker beat out Nike for the top-selling shoe of 2016 in the U.S., a Piper Jaffray’s report released on Monday confirms Adidas is officially cooler than its U.S. counterparts in their home markets.
The survey questioned 5,500 teens around age 16 across America, indicated the German company’s apparel segment bumped up to fifth place from 10th place last year, while its footwear preference reached records for females and a decade-high for males. At the expense of the world’s largest sportswear company, Nike, analysts said Adidas claimed its place as the leading “new brand” sported by men. (See also: Adidas Shares Hit All-Time High.)