Leaving the financials aside, a demographic analysis of countries across the globe reveals increasing awareness amongst more and more people about the importance of healthy lifestyles.
These changes provide a solid ground for future growth in revenue and profitability.
Heavyweight competition
The sports apparel industry boasts some of the biggest brands in the market. From NIKE, Inc. (NYSE:NKE) to Adidas all of whom have a global presence and strong supply chains. The sports apparel industry operates in a fragmented market with the top 10 players accounting for 25% of the total market size.
Lululemon Athletica inc. (NASDAQ:LULU) faces significant competition from Nike, adidas AG (ADR) (OTCMKTS:ADDYY) and Under Armour Inc (NYSE:UA), each of who are major players in the global sports apparel market.
NIKE, Inc. (NYSE:NKE) needs no introduction, from Cricket to football, NIKE, Inc. (NYSE:NKE)’s name is ubiquitous from the world’s most popular sports to the world’s biggest athletes who don their brand.
FY 2013 saw the company wrap another year of high growth in its top and bottom line. Revenue grew at a rate of 11% (excluding currency fluctuations) to reach $ 25 billion from continuing operations driven by growth in each key category, product type and geography except Greater China.
The company has so far recorded a strong growth in upcoming orders scheduled for delivery between June and November 2013 making a total order basket of $ 12.1 billion, an 8% increment from the same period a year ago.
The sports apparel leader is now preparing for the next wave of change as it announced strategic leadership changes with the retirement of brand president Charlie Denson, the 34 year veteran of the brand, in January 2014. The current EVP of Brand and Category Management, Trevor Edwards, will become the new NIKE Brand President leading all category and geographic business units.
Moving forward, a strong presence in emerging economies, an evolving and innovative product line and fundamental financial strength make the right atmosphere for the company to move on the path of strong growth in times to come.
adidas AG (ADR) (OTCMKTS:ADDYY) is another major brand in the global sports apparel market and a significant competitor in the global sports apparel market.
2012 saw the company deliver staunch financial performance. Overall group revenue increased by 6% supported by double digit growth in its retail, golf and other category businesses.
Earnings attributable to common shareholders increased 29% to € 791 million owing to an increase in operating margin to 8% and a decrease in operating working capital to sales ratio by 20%.
