The athleisure market is expected to stretch to US$257.1 billion in 2026, possibly in no small part helped by a mutating virus that prompted WFH orders, with workers swapping out suits for styled up hoodies. Despite playing them at their own game - doubling their direct to consumer sales in 2021 - it seems Under Armour (UA) (UAA) joins an athleisure wear industry yet to knock premium power players Nike (NKE) and Lululemon (LULU) off the winners’ podium.
While at 58-years-young Nike may enter the race as seniors, they’re high-jumping every other major sports label in China, despite Alibaba’s (BABA) play to enable questionable fake listings. Nike’s sales have more than doubled local sportswear brands Li Ning and Anta, who last year The Wall Street Journal hinted may yet sprint for victory. And it looks like investors sped ahead of Nike’s recent third quarter earnings reports, nudging their share price up 13.6% since mid-March, preceding Nike’s announcement of strong results despite their sliding market cap since November 2021.
What’s the secret sauce to Nike staying flavour of the month? 🍨 Nike’s iconic SB dunk collabs (like the Chunky Dunky)? Or their elite athlete’s LeBron James Innovation Center and sponsorships? Or is it their puzzling pivots, like France’s wealthiest football team Paris Saint-Germain swapping Nike’s swoosh for Jordan’s Jumpman, solidifying the club’s streetwear fashion-football (...to basketball?) status? Nike President and CEO John Donahoe puts their win down to their ‘deep consumer connections, compelling product innovation and an expanding digital advantage’, adding they’ve created ‘the right playbook to navigate volatility’.
Also vying for top medals, 24-year-old Gen Zer Lululemon reported strong revenue and profit in their fourth quarter, despite Omicron supply chains stretching the direct-to-consumer brand and warning of January staff shortages. Their flex? As well as upping the comfort factor in menswear, Lululemon this year tread into another stay-at-home staple, their Blissfeel sneakers. 👟 Are they coming after Allbirds (BIRD)? Perhaps fair after Allbirds have been breathing life into their own range of sustainable activewear. Battle lines drawn.