It wasn’t exactly the Sell, Sell, Sell call by Dan Akroyd and Eddie Murphy in the movie Trading Places, but Bank of America’s double downgrade of Adidas AG shares today appeared to make a lot of headlines but did not result in much downward movement for the company’s stock on the Frankfurt exchange.
Adidas AG (ADS:DE) shares were down less than 4 percent at the closing bell on Tuesday, January 6 after Bank of America issued a rare double downgrade from BUY to UNDERPERFORM on ADS shares, as well as a cut in the stock’s price target (PT) to €160, warning that growth is set to slow as Nike regains its footing and the general direction in the active lifestyle consumer space has played out as more performance brands continue to build share.
In other words, it appears that BofA may see the Sportsyle trend slowing and the performance bump from the World Cup and the Winter Olympics may only result in a short-term bump – at least in Europe. SGB Executive noted that the slowing in the lifestyle market mentioned in BofA’s sector note only referred to the European market.
“The group upcycle equity story is well known and stopped leading to EPS upgrades several quarters ago. Meanwhile, the Adidas brand is now moving to a single-digit organic sales growth (OSG) profile and (later) EBIT margin on our BofAE, in a deteriorating sector context,” BofA wrote in their note.
Barron’s went so far as to proclaim, “The Casual Footwear Boom Is Over. It’s Bad News for Adidas.” as its headline for the story. The publication also wrote that Bank of America said “the boom in casual footware ushered in by the pandemic has ended, a potential problem for companies such as Adidas that benefited from the shift to less formal clothing.”
Editor’s Note: Footware is not a typo here. That is how Barron’s reported it.
The Economic Times reported that analysts, led by Thierry Cota cut the rating to underperform from buy and lowered their PT to €160, the lowest among analysts tracked by Bloomberg, as per a Bloomberg report. That PT implies about a 6 percent decline from the previous close, according to the India-based financial paper.
ADS shares closed down 3.5 percent to €163.85 on the Frankfurt Exchange on Tuesday.
While BofA expects the 2026 FIFA World Cup to provide a temporary boost to Adidas, analysts cautioned that momentum could fade once the event passes.
According to Bloomberg, Cota and his team wrote, “The question is what comes after the World Cup boost,” adding, “We expect sporting goods names with sustained and strong growth, like On and Asics, to be more in focus in a sector where investor interest is waning.”
What seems to be missing here is the background and recent results for the brands that are mentioned. The majority of Asics percentage growth and operating profit growth is coming from the lifestyle side of the business.
At Asics North America, the United States region posted single-digit growth in the 2025 third quarter while Canada and Mexico each produced double-digit quarterly growth compared to the previous year, measured in local currency. The U.S. did not appear to be on fire outside of the Run Specialty channel and Sportstyle.
The SportStyle category of products “remain incredibly popular” in Q3 2025, generating high double-digit revenue increases with key strategic wholesale partners, according to Asics North America. The Run Specialty channel delivered 20 percent quarterly growth compared to the 2024 Q3 period.
On a global basis, Asics Sportstyle and Onitsuka Tiger each grew more than 45 percent year-over-year in the nine-month period ended September 30, with operating profits growing more than 50 percent. The Performance category grew 10 percent for the same period.
At the recent The Running Event (TRE) conference and trade expo, research firm Circana and consultancy firm Karnan Associates indicated that the run specialty channel did experience growth this year, but it was largely driven by higher average selling prices rather than increased unit sales and in-store traffic.
The On brand, which BofA called out in its note, reportedly saw the steepest decline in the Run Specialty channel for the most recent quarter reported, according to Karnan Associates data. On brand sales dropped 19.7 percent in dollars at Run Specialty, resulting in its rank sliding to No. 6 as Saucony moved up to No. 5. On appears to be making their biggest inraods in direct-to-consumer and big-box retailers.
To get a better feel for the U.S. market, SGB Executive reached out to Matt Powell, senior adviser, BCE Consulting, for his take on the observations outlined by Internet-based reporters interpreting the BofA notes.
“There is zero indication that casual footwear is slowing down,” Powell told SGB Executive. “Sport Lifestyle footwear is half of the sneaker business in the U.S. More than half of all performance shoes are not worn for their intended purpose. So you could argue that the Performance side of the business is in trouble, not the other way around. Run Specialty [Retail] sales are flat, because they are not playing in the Sportswear side of the industry.”
Powell continued, “Adidas has slowed down as the Samba trend has run its course and no new shoe has stepped up to replace it. But sneakers are here to stay.”
The long-time active lifestyle industry advisor, analyst and former retailer said it’s too soon for Nike’s comeback to hurt Adidas.
“On and Hoka are decelerating,” he said. “So while the Adidas business is not as good as it was, it’s not over.”
Image courtesy Adidas AG
