Wrapping up 2025:  U.S. athletic footwear 

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US Footwear Industry Update – Tariff Impacts, Nike Recovery & Dick's Sporting Goods' Announced Acquisition of Foot Locker

Key insights 

• Expert is optimistic about Dick's acquisition of Foot Locker. Maintaining separate cultures and consumer segments will be crucial, but "might be a situation where both companies have to slow down to speed up”
• “[M]y gut would tell me that [Dick's] might reduce the number of ads [...] now, with this acquisition, are going to be in markets [...] they perhaps weren't in before"
• Nike’s turnaround is showing positive signs – "first signal is what they just did with the four-minute mile and that innovation […] next step in that is how do you scale that to retail”
• Nike's return to Amazon as a first-party seller allows more control over product offerings and timing compared to previous third-party arrangement
• Tariffs may hinder companies' ability to invest into scaling innovation over the near term. Companies may look to smaller factories in non-tariffed regions for testing and limited production of newness until headwinds subside

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Nike – Women's Category Opportunities, Distribution Model Update & Product Development

Key insights 

• Expert is "very optimistic" about Nike's potential to return to positive sales growth by FY27. "I'd be looking for key product launches, partnerships with signature athletes and partnerships with DSG and JD" and progress on marketplace cleanup
• Pushing "for full price, factory stores would be a way to do that. That is a product that is universal" and it "does not always have to be on deal"
• Better "segmentation and a distinction in the marketplace would be in their favour […] strengthening their merchandising function […] the market cannot be homogenous"
• The "challenge will be to innovate, seed, scale and maximise […] whatever the obstacle, they need to clear that […] sometimes their innovation, they incubate something for a long time"
• There's opportunity in the women's category "in innovation to have a shorter incubation time and to start with her and then scale it to the men's and kids"

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On Running – Distribution Strategy, Growth Outlook & Market Share Dynamicss

Key insights 

• Expert expects "double-digit growth numbers over the next 12-18 months. Looking at where they are in wholesale […] that ceiling could potentially hit come 2028, just in terms of how much further can they really take space of inventory with all these retailers"
• D2C, particularly e-commerce, lags wholesale and needs significant improvement to drive future expansion
• 20% EBITDA margin goal is "very ambitious". Even if operational efficiency investments "have kept that goal alive […] it's more of a target than a reality" as margin levers become limited
• Expert suspects inventory management issues will continue into 2026-27, as ambitious growth may lead to overstock issues and potential off-price liquidation risks
• On Running must increase, "customer service investment for wholesale […] investment in human resources isn't as high […] that is definitely a red flag for unsustainable long term […] knowing that the business is just going to continue to grow

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