In a recent report, analysts at Citigroup focused on the athletic apparel space. Citi analysts gave their take on several of the top names in athletic apparel and discussed their top apparel stock and their top vendor stock.
Undisputed Global Leader
Analysts see Nike Inc NKE 0.78% as the cream of the crop and their top stock pick in athletic apparel. Analysts praise Nike’s segmentation and premium strategies and note that Nike has continued to gain market share in both the U.S. and in Europe, where Adidas has historically been the top name.
A former Adidas executive recently told Citi that soccer remains the most important category outside of the U.S., and Nike has now surpassed Adidas on that front. In addition, Nike has now assumed the lead in nearly every major footwear category worldwide.
The Competition
Analysts believe that other names have a tough road ahead if they intend to gain market share from Nike. They believe that Adidas does have an opportunity to re-gain lost share from Nike, but analysts point out that executing that strategy could be a “significant challenge.”
The report mentions Brooks, Asics, Mizuno and Under Armour Inc UA 2.41% and Lululemon Athletica inc. LULU 1.44% (for women) as names that have emerged in the space in recent years. However, analysts see Nike and Adidas on a completely different level from the rest of the field.
Vendors
Despite an increased focus on online and direct-to-consumer retailing, analysts still see Foot Locker, Inc. FL 0.76%, Finish Line Inc FINL 0.08% and Dicks Sporting Goods Inc DKS 0.37% as “important points of U.S. distribution.” Analysts highlight Foot Locker’s dominance in Europe as one of the major reason’s the stock is their top pick among vendors.
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