According to Shenwan Hongyuan's research report, the latest financial quarter results show that Deckers, Adidas, VF, Nike, and Lululemon exceeded earnings expectations, while Puma's revenue and profits remained under pressure but were generally in line with forecasts. Looking ahead to the next quarter, Nike and VF have adopted a cautious outlook, though most sports brands, including Adidas, project full-year revenue growth in the low single digits.
Inventory-wise, Adidas saw a significant year-on-year increase, primarily to ensure timely supply for World Cup-related products. Overall, in Q3 2025, most international sports brands surpassed expectations, while domestic sports brands experienced marginal softening in sales. However, structural opportunities emerged in specialized brands, high-performance outdoor gear, and new sportswear subcategories.
**Key Findings on International Sports Brands:** Most brands outperformed expectations, signaling a broad recovery in earnings. Deckers, Lululemon, Adidas, VF, and Nike reported revenue growth of +9.1%, +7.1%, +3.0%, +1.6%, and +1.1% YoY, respectively, while Puma's revenue declined by 15.3%. Net profits varied, with Deckers (+10.7%), Adidas (+4.1%), and VF (+263.7%) posting gains, whereas Nike (-30.8%) and Puma (turning to a loss) faced challenges.
**Outlook for Next Quarter:** Nike anticipates a low single-digit revenue decline, though the drop is narrowing sequentially. VF, which posted 1.6% revenue growth (or -1% excluding currency effects), expects a 1-3% decline next quarter, reflecting cautious guidance.
**Full-Year Projections:** Most brands forecast single-digit revenue growth—Deckers (7%), Adidas (9%), Lululemon (4%)—while Puma expects a low double-digit decline.
**Regional Performance:** - **North America/U.S.:** Sales remained sluggish, with Adidas, Lululemon, Puma, VF, and Deckers reporting declines, while Nike grew 4%. - **Greater China:** Lululemon surged 42.4%, Adidas edged up 0.1%, and Nike fell 9.2%, as demand recovery and inventory adjustments eased pressure. - **Europe/EMEA:** Adidas, VF, and Nike grew 8.2%, 6.3%, and 6.0%, respectively, signaling a recovery trend despite Puma's 9.4% drop.
**Inventory Trends:** Nike reduced inventories by 1.7% YoY, with EMEA and Greater China leading the decline. Adidas, however, boosted inventories by 20.9% to secure World Cup product availability, prioritizing supply chain reliability.
**Domestic Sports Brands:** Sales softened marginally in Q3, but niche outdoor and value-driven brands stood out. - **ANTA:** Outdoor brands grew robustly, though the core brand’s guidance was revised downward to low single-digit growth. - **XTEP:** Delivered steady growth, with its Saucony brand surging over 20%. - **361 Degrees:** Maintained double-digit growth, with offline and e-commerce sales rising ~10% and 20%, respectively.
**Investment Recommendations:** - **Global Supply Chain Manufacturers:** Shenzhou International (02313), Huafu Fashion (300979), XinAo Textile (603889), Weixing New Materials (002003), Bairun Group (601339). - **Sports & Outdoor Brands:** Bosideng (03998), ANTA (02020), Topsports (06110), 361 Degrees (01361), with potential in Li Ning (02331) and XTEP (01368).
**Risks:** Slower-than-expected global demand, inventory adjustments, heightened competition, and trade uncertainties.
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