UPDATE: Bank of America has just announced a shocking double-downgrade of Adidas, slapping a “sell” rating on the company’s stock. This bold move comes as analysts predict the end of a significant 20-year trend towards casual fashion, marking a critical shift in consumer behavior.
According to Bank of America, the “casualization” of fashion has peaked, suggesting that styles once dominated by relaxed attire are now giving way to a demand for more traditional sportswear. The firm reports that sneakers have surged from making up 20% to 50% of the footwear market during this period. However, it believes that Adidas will face severe challenges ahead, with projected organic sales growth shrinking into the single digits.
This warning comes as Adidas shares plummeted by as much as 7% on Tuesday following the downgrade, reflecting a growing concern among investors. While many Wall Street analysts remain optimistic about Adidas’ future after a 29% drop in 2025, Bank of America’s assessment is starkly pessimistic, thinking Adidas could struggle amid increasing competition from brands like Nike, Asics, and On.
The sportswear giant Nike, which has recently experienced a resurgence, is also a key player to watch. A turnaround under CEO Elliott Hill has been marked by strong growth in North America, signaling an upward trajectory. Bank of America warns that if Nike continues to grow, Adidas could face even steeper declines, as their revenues historically move in opposite directions.
In a surprising twist, attention has turned to the upcoming FIFA World Cup, where Adidas is banking on endorsements from its star athlete, Lionel Messi, to drive sales. However, Bank of America remains skeptical, indicating that any boost from the tournament may be short-lived, with the company likely returning to face its ongoing challenges post-event.
In this rapidly evolving landscape, Adidas now finds itself at a crossroads. The end of the sneaker-with-suits trend may emerge as a silver lining, as consumers shift back toward more formal attire. As the fashion world pivots, the implications for Adidas are significant, potentially reshaping its identity in the market.
As the situation develops, investors and consumers alike will be watching closely for how Adidas navigates these changes. Stay tuned for further updates on this urgent story that could redefine an iconic brand in the years to come.
