US athletic apparel demand remains resilient, but divergence between winners and laggards is widening

Overview

This report is Bernstein's monthly real-time tracking of demand and supply for US athletic apparel brands and retailers. It covers metrics including foot traffic, observed sales, web traffic, inventory SKUs, discount breadth and depth, average realized prices, app downloads, and engagement. The report focuses on covered companies such as Nike, Adidas, Lululemon, Hoka, and On, while also including comparable companies such as Under Armour, Alo Yoga, Vuori, Skechers, Asics, New Balance, VFC, Crocs, Foot Locker, Dick's Sporting Goods, and Academy Sports.

Core views

The core conclusion is that US athletic apparel demand remains healthy, but sales momentum is clearly diverging. Improving traffic and web traffic, generally controlled inventory, and no broad deterioration in promotions support a constructive supply-demand environment for the summer and back-to-school seasons. At the brand level, Adidas remains very strong, On's trend is improving, and Alo and Vuori continue to maintain high growth. By contrast, Nike's trend remains negative, Lululemon's decline continues to worsen, and Deckers-related trends have fallen to flat or slightly negative.

Analysis framework

The report cross-validates industry demand and supply using multiple high-frequency data sources: offline traffic to observe store interest, debit- and credit-card spending to observe sales trends, web traffic to track online demand, DTC website SKU counts to measure inventory, discount breadth and depth to assess promotional pressure, average realized prices to evaluate price pass-through after price increases and discounts, and app downloads and weekly active users to observe digital-channel engagement.

Methodology notes

• High-frequency consumer trackingReal-time tracking of athletic apparel demand and supply

  Multi-metric cross-validation

  Traffic, observed sales, web traffic, inventory, discounts, prices, and app engagement are analyzed together to avoid misjudging industry demand based on a single indicator.

• Brand comparisonAnalysis of divergent brand momentum

  Segmentation of winners and laggards

  Year-over-year changes and sequential trends in traffic, sales, and pricing are compared across brands to identify stronger performers such as Adidas, On, Alo, and Vuori, as well as pressured brands such as Nike and Lululemon.

• Supply and promotion analysisSKU and markdown tracking

  Assessment of inventory and promotional pressure

  DTC website SKU counts are used to measure inventory levels, discount breadth and depth to measure promotional intensity, and average realized prices to assess pricing quality.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Adidas

  Athletic apparel brand, rated Outperform by Bernstein

  Strengths

  Strong sales trends, double-digit year-over-year price increases, and improving app engagement; inventory has increased sequentially due to new merchandise but remains controlled.

  Weaknesses

  Still exposed to industry risks including slower overall athletic apparel growth, cost inflation, and supply concentration.

  Comparison

  Adidas currently has stronger sales and pricing performance than Nike and Lululemon.

  Risks

  Declining brand heat, excessive discounting or distribution, and cost and supply-chain pressure.

• Nike

  Athletic apparel brand, rated Outperform by Bernstein

  Strengths

  Traffic improved in June, average realized prices remained higher year over year, and the target price is $72.

  Weaknesses

  Observed sales remain negative, while the pace of recovery and market share remain under scrutiny.

  Comparison

  Momentum is weaker than at Adidas, On, Alo, and Vuori.

  Risks

  Slow recovery in China, continued market-share loss, intensifying competition in North America, and cost and supply-chain risks.

• On Holding

  Running and athletic brand, rated Outperform by Bernstein

  Strengths

  Improving trends and positioning benefiting from the strength of running brands and a high-growth category.

  Weaknesses

  Growth and margins still need to be balanced, and traffic may become more volatile as the brand matures.

  Comparison

  Performance is better than Nike and Lululemon, but the brand still needs to compete with Adidas, Asics, and New Balance.

  Risks

  Lack of novelty, share capture by Nike, Adidas, or new entrants, and cost and supply-chain pressure.

• Lululemon

  Athletic apparel brand, rated Market-Perform by Bernstein

  Strengths

  The brand remains well known, and some traffic metrics continue to provide support.

  Weaknesses

  Sales trends are deteriorating, SKU counts are elevated, discount pressure is greater, and average realized prices remain lower year over year.

  Comparison

  One of the clearest negative exceptions in the report, with weaker pricing performance than most athletic apparel brands.

  Risks

  Failure to adapt to consumer preferences, weakening of its technical-performance image, excessive fashion orientation, and brand dilution from wholesale expansion.

• Deckers / Hoka / Ugg

  Athletic and casual footwear portfolio, with Deckers rated Market-Perform by Bernstein

  Strengths

  Ugg may continue to maintain a high full-price sell-through rate, and there is upside potential if US demand for Hoka recovers.

  Weaknesses

  Hoka's trend has slowed to flat or slightly negative, and pricing support has weakened.

  Comparison

  Momentum is weaker than at Adidas and On; further data are needed to validate whether performance remains better than that of brands experiencing a complete loss of momentum.

  Risks

  Hoka and Ugg innovation falling short of expectations, intensifying competition in core categories, promotional and cost pressure, and supply concentration risk.

Key data

• RatingNike, Adidas, and On: Outperform; Lululemon and Deckers: Market-PerformFrom Bernstein's Ticker Table and investment implications sections.
• Target pricesADS.GR €245; ADDYY $132.50; NKE $72; LULU $145; ONON $70; DECK $105Target prices disclosed for covered companies.
• Traffic trendSportswear Overall approximately +3% YoY in JuneExhibit 1 shows that overall athletic apparel traffic improved from the prior period.
• Average priceAdidas approximately +19% YoY in June, Nike approximately +7% YoY, Lululemon approximately -10% YoYExhibit 71 shows that average prices increased year over year for most brands, with Lululemon the main negative exception.
• InventorySKU counts broadly flat for most brands, with elevated inventory at LululemonThe report states that inventory was generally stable at Nike, On, Hoka, Puma, Asics, Under Armour, North Face, and Skechers, while Lululemon's inventory was elevated due to accumulated spring merchandise.
• App metricsConfirmed and SNKRS downloads surged, while Adidas app weekly active-user growth was positive in most periodsExhibits 83 and 84 point to improving digital-channel engagement.

Impact & implications

For investors, industry-level data support the view that US athletic apparel demand remains resilient and that price increases have not yet caused a significant demand shock for most brands. However, stock selection is becoming more important. Momentum is healthier at Adidas, On, and certain emerging brands and retailers, while Nike and Lululemon need to demonstrate a recovery in sales trends and product momentum. The slowdown at Deckers/Hoka requires continued monitoring.

Risks

• Slower overall athletic apparel growth, particularly as year-over-year pressure increases against elevated post-pandemic comparisons.
• Deteriorating consumer confidence, external uncertainty, and tariff-related price increases could weigh on demand.
• Excessive discounting or distribution could damage brand heat and full-price selling capability.
• Inflation, freight, channel expenses, marketing expenses, and other operating costs could compress margins.
• Intensifying competition among brands such as Nike, Adidas, Asics, New Balance, and On could result in share loss.
• Supplier concentration could create supply-chain disruption risk.
• If Lululemon cannot adapt to consumer preferences or maintain its reputation for technical performance, sales and brand valuation could remain under pressure.

What to watch

• Whether traffic, web traffic, and observed sales continue to improve during the summer and back-to-school seasons of 2026.
• Whether Nike's negative sales trend bottoms out and whether market share in China and North America recovers.
• Whether Lululemon's elevated SKU levels, discount pressure, and declining average prices ease.
• Whether the introduction of new Adidas merchandise continues to drive growth while inventory remains controlled.
• Whether high-growth brands such as On, Alo, and Vuori can maintain traffic and sales momentum as they mature.
• Whether trends at Hoka and Deckers reaccelerate from flat or slightly negative levels.
• Whether tariff-driven price increases continue to be absorbed by consumers or begin to cause a demand shock.
• Whether downloads and weekly active users for Confirmed, SNKRS, and the Adidas app continue to improve.