UPDATE: Bank of America has just announced a rare double-downgrade of Adidas, slapping a “sell” rating on the stock amid a significant shift in fashion trends. This urgent call comes as the 20-year trend toward casual attire appears to be reaching its end.
The investment firm warns that Adidas will see organic sales growth plummet into the single digits, reflecting a decline in brand appeal. The announcement has already impacted Adidas shares, which fell by as much as 7% on Tuesday.
BofA’s research indicates that the “casualization” period—where sneakers skyrocketed from 20% to 50% of the footwear market—has peaked. As society embraces casual wear, including pajamas at airports and sneakers paired with suits, Adidas faces tough competition from emerging brands like Vuori and Alo, which offer sweatpants at premium prices.
While most analysts remain bullish on Adidas, following a 29% drop in 2025, BofA’s bearish stance stands out. The firm notes that other major players in the sneaker market, like Asics and On, will likely gain ground as consumer preferences shift towards sporting goods rather than casual attire.
Additionally, Nike, despite facing its own challenges, is on a turnaround path under CEO Elliott Hill. The company reported strong growth in North America, signaling a potential recovery that could further hurt Adidas. Historical data suggests that when Nike thrives, Adidas often suffers, creating an inverse relationship in revenue growth.
As excitement builds around the upcoming World Cup, where Adidas ambassador Lionel Messi will compete, BofA cautions that any temporary sales spike will not resolve the underlying issues facing the brand. The firm predicts that once the World Cup concludes, Adidas will be confronted with the same struggles it has faced throughout the year.
In a striking conclusion, BofA’s analysis hints at a possible silver lining for consumers: the fading trend of sneakers worn with suits. As the industry evolves, the end of this fashion phenomenon may offer a refreshing change for professional attire.
Stay tuned for more updates as this situation develops.
