World Cup 2018 was a huge boon to Adidas

Daniel Roberts
Senior Writer
Adidas supplies the official ball for the FIFA World Cup. (Reuters)

At a time when sports apparel brands are still hurting from the closure of brick-and-mortar chains like Sports Authority, Adidas reported stellar Q2 2018 earnings on Thursday.

The German giant saw sales in the quarter rise 20% to 5.3 billion euros or $6.11 billion (compared to 5.2 billion euros expected) and profit rise 20% to 418 million euros or $482 million (compared to 387 million euros expected), both healthy beats. The company confirmed its 2018 outlook of a 10% sales rise. Adidas shares rose nearly 10% after earnings, and the stock is up 19% in 2018 so far.

But the biggest area of interest is U.S. growth: Adidas and Reebok brand sales grew a combined 16% in North America in the second quarter, while Nike sales grew only 3% in North America in its second quarter.

In other words: Adidas is growing five times faster than Nike in America.

The 2018 FIFA World Cup provides an interesting comparative case study. Adidas (ADDYY) has been the official ball supplier since 1970, which means its logo was front and center in every match. Adidas was also the jersey sponsor of more teams in this year’s World Cup than Nike. On the other hand, Nike (NKE) was the jersey sponsor of the team that won it all and likely garnered the most eyeballs: France.

Both brands benefited from the World Cup, but it was apparently a particular boon to Adidas. The company said in its earnings presentation that it saw a 26% rise in online sales, thanks to 2.5 million new downloads of its e-commerce app, “supported by World Cup stadium advertising.”

Adidas believes physical signage at World Cup matches drove fans to download its app. It also says Adidas was the most influential brand on social media during the World Cup, though measuring such things is typically an inexact science. Its physical retail comps (some companies use the term same-store sales) were up mid-single digits, a less impressive number, but Adidas notes that comps were “positively impacted by World Cup.”

The company also said that global jersey sales during the World Cup, online and on-site at stadiums, exceeded World Cup 2014. Adidas framed that as, “commercial success despite unexpected development of tournament,” likely referring both to the U.S. team missing the Cup and to the final being Croatia vs France, both Nike-sponsored teams.

If anything, World Cup 2018 gave Adidas such a boost that it will struggle to match the same growth numbers next year, as NPD retail analyst Matt Powell pointed out on Twitter.

“We delivered another strong quarter,” CEO Kasper Rorsted said, “on the back of a successful World Cup activation. Our profitable growth was once again driven by our strategic focus areas: North America, Greater China and e-commerce.” An Adidas spokesperson added, in a statement to Yahoo Finance, “The World Cup was a great stage for our brand, and we stepped onto this stage in a very impactful way.”

At the end of 2016, we named Adidas our Yahoo Finance sports business of the year for its strong momentum in the sneaker market and its savvy product innovation. Two years later, the company is still making big strides against Nike, which remains the top dog in global sports apparel.

Daniel Roberts covers sports business, tech and media at Yahoo Finance. Follow him on Twitter at @readDanwrite.

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