UPDATE: Adidas is facing a critical stock downgrade as Bank of America (BofA) issues a rare double-downgrade, slapping the company’s shares with a “sell” rating. This alarming shift comes as analysts warn that the 20-year trend towards casual attire is reaching its end, signaling potential trouble for the sportswear giant.
BofA’s stark assessment contrasts sharply with the generally bullish outlook from other Wall Street analysts. The firm highlights that the societal shift towards casual clothing, including wearing sneakers with suits and pajamas at airports, has peaked. As a result, Adidas is expected to see its organic sales growth shrink into the single digits, a significant concern for investors.
In new research, BofA emphasized that the sneaker market has exploded from 20% to a staggering 50% over the past two decades, indicating a saturation point. The change in consumer preferences poses a direct threat to Adidas as it struggles to maintain its brand appeal. Shares plummeted as much as 7% on Tuesday in response to this news.
Despite a 29% decline in 2025, most analysts remain optimistic about Adidas, but BofA’s bearish stance raises eyebrows. The firm predicts that competitors like Nike, Asics, and On could gain a significant edge as consumers pivot away from casual fashion towards performance-oriented sporting goods. Nike, in particular, is undergoing a turnaround under CEO Elliott Hill, with its recent earnings report showing strong growth in North America.
The stakes are high as the World Cup approaches. Many had anticipated that defending champion Lionel Messi would drive sales for Adidas during the tournament. However, BofA warns that once the excitement of the World Cup subsides, Adidas will still face the same underlying challenges.
In a twist of irony, the potential decline of Adidas could lead to the end of the “sneakers-with-suits” trend, which has permeated daily life and professional settings. As consumers become more discerning, the future of Adidas hangs in the balance, raising questions about its ability to adapt in a rapidly changing market.
Investors and consumers alike are watching closely as Adidas grapples with these pressing challenges. The company’s next moves will be critical in determining its future trajectory in an increasingly competitive landscape. Stay tuned for more updates on this developing situation as the implications unfold.
