Retail Associate

Nike has approved an AI system from South Korea-based Genon to automatically detect defective outsoles in footwear production. The system will first roll out in Nike's Indonesian factories from 2027, covering outsole quality checks on select lines. Nike and Genon plan to extend the automation to more products and manufacturing lines afterwards. Tighter defect detection could cut scrap, rework, and returns, supporting the cost programmes behind Nike's turnaround. The company has a market value of about $56.9 billion. The move does not address weak demand in Sportswear, Jordan, and Greater China.

Nike shares fell 42.1% over the past year, including dividends, while the S&P 500 gained 15.1%. Even so, Nike trades at 18.4 times earnings, above Tapestry's 15.0 times, yet its growth and margins lag most peers. Nike's revenue fell 1.2% over its latest four quarters, while Tapestry's grew 14.2%. Nike's operating margin is 8.2%, against Tapestry's 23.9%. Management is deliberately cutting some lines. Dunk sneaker revenue fell nearly 50% in the latest quarter, a hit of about $200 million, and Greater China revenue dropped 26%. Performance products grew by high single digits. Nike expects fiscal 2027 revenue to fall in the high single digits. It will present its long-term growth plan at an Investor Day in November.

Adidas accelerates and widens its lead over Nike. In the race amongst sporting goods manufacturers, Adidas has gained a few lengths on its American rival. Driven by record results and upgraded forecasts, the German group is accelerating, while Nike is still looking to regain its pace. Published on 10/21/2026 at 09:05 am EDT MarketScreener.com Adidas shares jumped after the company raised its FY earnings forecast. The German group announced a 37% increase in operating income in Q3, supported by sales growth and an estimated €300m reimbursement of US tariffs. Q3 operating income thus reached a record €1.008bn, compared with €736m a year earlier. According to Commerzbank, the operating margin reached approximately 11.1%, 50bp above expectations excluding the tariff effect. This outperformance represents approximately €100m in additional operating profit, much to investors' delight. At AlphaValue, analyst Jie Zhang also noted the positive surprise and raised her earnings estimates. The trend is reinforced by Adidas' announcement that it intends to reinvest all of the anticipated gains directly to support its future growth. While Adidas pulls ahead, Nike is still looking to get off the starting blocks The two historic sportswear rivals are competing on three fronts: products, retailers and profitability. While Adidas has regained strong appeal with the Samba and Gazelle, these retro sneaker models are reaching maturity, making it necessary to invest in new products. By contrast, Nike is attempting to correct several strategic mistakes. Under Elliott Hill, the group is refocusing on performance footwear, renewing its collections and seeking to restore its relationships with retailers. The group has notably lost ground in China this year, opening up new commercial opportunities for Adidas. Although Nike remains larger than Adidas in terms of revenue, the market is punishing its inability to return to growth more than its current competitive position. However, a major retailer, JD Sports, remains optimistic: its chief financial officer told Reuters in September that Nike was making the right decisions, but that a company of its size could not recover in six months. The owner of TaylorMade and Reebok has thus benefited from sales of retro apparel and the World Cup effect in order to invest in launching new models and expand relative to its American counterpart. Indeed, the commercial battle between Nike and Adidas is also being played out on the stock market, where the German company has held up better than its American rival. Over one year, Nike has lost nearly 45% of its value, compared with just 18% for Adidas, representing a performance gap of approximately 26 percentage points. (C) MarketScreener.com - 2026