Athletic Footwear & Apparel
Athletic Footwear Strategy
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Thesis
Why this sector matters to investors right now. Structural, not market timing.
Athletic footwear and apparel in 2026 is no longer a single Nike-versus-Adidas share fight. The generalists still set the scale (Nike FY2026 revenue $46.4 billion, Adidas 2025 sales €24.8 billion), but the live questions sit in three other places: running specialists compounding from a smaller base (On CHF 3.01 billion, HOKA $2.59 billion, ASICS ¥810.9 billion), China local groups that are now larger than either global brand's Greater China print (Anta RMB 80.2 billion), and a wholesale-to-Direct mix that has stopped being one-directional. Nike Brand Direct fell to $17.7 billion in FY2026 while wholesale rose to $27.5 billion. That is the opposite of the 2010s mix-shift story.
The other structural fact is manufacturing geography. Nike Brand footwear in FY2026 came 52% from Vietnam, 27% from Indonesia, and 16% from China. US tariff policy in 2025 and 2026 showed up in reported gross margins (Under Armour 45.5%, down 240 basis points, primarily tariffs; lululemon about $275 million of unmitigated tariff and de minimis cost). The sector is a brand-and-channel business sitting on a concentrated Asian contractor base.
Structural drivers
Forces that shape long-run demand and economics. Each driver is sourced.
- •Running specialists are still taking the growth. On 2025 sales rose 30% to CHF 3,014 million with a 62.8% gross margin. HOKA rose 16% to $2.59 billion inside Deckers in FY2026. ASICS FY2025 sales rose 19.5% to ¥810.9 billion. Source: On FY2025 8-K, Deckers FY2026 10-K, ASICS FY2025 financial summary.
- •China local groups have scale that global Greater China segments no longer match. Anta 2025 revenue was RMB 80.2 billion (about $11.3 billion at the IRS 2025 average). Nike Greater China was $5.85 billion in FY2026. Adidas Greater China was €3.62 billion. Source: Anta HKEX results, Nike FY2026 10-K, Adidas Annual Report 2025.
- •lululemon's growth is international. FY2025 revenue $11.10 billion, Americas $7.85 billion (-1%), China Mainland $1.75 billion (+29%). Source: lululemon FY2025 10-K.
- •Wholesale is not dead. Nike Brand wholesale rose to $27.45 billion in FY2026 from $25.88 billion. Adidas wholesale was €14.83 billion versus DTC €9.93 billion. Source: Nike FY2026 10-K, Adidas Annual Report 2025.
- •Direct still has the richer mix where traffic holds. On DTC grew 34% to CHF 1.26 billion. VF DTC was 44% of FY2026 revenue. lululemon stores plus e-commerce were 90% of FY2025 sales. Source: On FY2025 8-K, VF FY2026 10-K, lululemon FY2025 10-K.
- •Gross-margin spread across the roster is wide and persistent: On 62.8%, Anta 62.0%, Deckers 57.7%, lululemon 56.6%, Adidas 51.6%, Nike 42.9%. That spread is brand and channel, not a one-year accident. Source: company filings listed above.
- •Jordan Brand remains a Nike-specific profit pool at $7.03 billion in FY2026, down from $8.70 billion in FY2024. Source: Nike FY2026 10-K.
Structural risks
Forces that could compress demand, change economics, or break the thesis.
- •Nike Greater China is still shrinking. FY2026 revenue $5.85 billion, -13% currency-neutral, with wholesale -14% and Direct -12%. Management said marketplace health actions and weak traffic will keep weighing on FY2027. Source: Nike FY2026 10-K MD&A.
- •Converse is in a reset: $1.17 billion in FY2026, down 31%. Source: Nike FY2026 10-K.
- •Tariffs. Under Armour FY2026 gross margin 45.5%, down 240 bps, primarily higher tariffs. lululemon quantified about $275 million of unmitigated tariff and de minimis cost in FY2025. VF's 10-K records IEEPA tariffs, the February 2026 Supreme Court invalidation, and replacement duties. Source: UA FY2026 Q4 release, lululemon FY2025 10-K, VF FY2026 10-K.
- •Contractor concentration. Four Nike footwear manufacturers each exceeded 10% of FY2026 production and 60% combined. Vietnam is 52% of Nike Brand footwear. A Vietnam shock is a Nike shock. Source: Nike FY2026 10-K Item 1.
- •Puma is in a commercial reset. 2025 sales €7.30 billion, down 13.1% in euro terms, after a mid-year forecast cut. Source: Puma Annual Report 2025.
- •Under Armour North America is still declining: $2.86 billion in FY2026, down 7.9%. Source: UA FY2026 Q4 release.
- •Circana / NPD running unit share is paywalled and is not used on this page. Category-share claims that cannot be cited to a primary filing are a research risk, not a chart. Source: ATHLETIC_DATA_CHECKLIST.md Step 3.
Competitive landscape
How to think about the players. Framing along axes (pure play vs diversified, incumbent vs challenger, etc). Not stock picking.
Think in archetypes, not a ranked list. Global generalists (Nike, Adidas, Puma, New Balance) own scale, sports marketing, and wholesale relationships, and they are defending running and China. Running specialists (On, HOKA inside Deckers, ASICS) own the growth rate and the premium gross margin, and they are still small enough that a bad wholesale season shows up immediately. China groups (Anta, Li Ning) own the domestic brand fight and are not a residual of Nike Greater China. Technical apparel (lululemon) is a Direct machine whose Americas traffic is the swing factor. Training (Under Armour) is a North America turnaround with a tariff overlay. VF is outdoor plus Active (Vans), on the roster because Nike names it, not because it is a running brand.
Key metrics to watch
The operational and financial metrics that matter most in this sector. Each one names its source and update cadence.
| Metric | Source | Frequency | Why it matters |
|---|---|---|---|
| Nike Brand wholesale vs Direct | Nike 10-K / 10-Q, Note 14 disaggregation | Quarterly and annual (May fiscal year) | The 2010s thesis was Direct mix up. FY2026 reversed it. If Direct keeps falling while wholesale only fills the hole with promotions, the margin mix is the story. |
| Nike Greater China revenue and EBIT | Nike 10-K / 10-Q segment tables | Quarterly and annual | The largest single geographic drag on Nike, and the cleanest read on whether global brands are still relevant in China. |
| On net sales, DTC mix, and apparel mix | On 20-F and quarterly 6-K / 8-K | Quarterly | Tests whether the running specialist can become a toe-to-head brand without giving up the 60%+ gross margin. |
| HOKA brand net sales inside Deckers | Deckers 10-K / 10-Q brand tables | Quarterly (March fiscal year) | The running brand versus UGG. If HOKA growth slows to UGG's rate, Deckers is a two-brand lifestyle company again. |
| Anta brand split (ANTA / FILA / other) | Anta HKEX annual and interim results | Semi-annual | Other brands are the growth engine. A stall there is a different company than a stall in ANTA itself. |
| lululemon Americas vs China Mainland dollars | lululemon 10-K / 10-Q geographic tables | Quarterly (late-January fiscal year) | International cannot carry the multiple forever if Americas comparable sales stay negative. |
| Reported gross margin and any named tariff bridge | Company 10-K / 10-Q and earnings releases (UA, lululemon, Nike, VF) | Quarterly | The 2025 to 2026 duty stack is large enough to move GM by hundreds of basis points. Watch named tariff lines, not just the total. |
Catalysts and milestones
Known upcoming events that could move the sector. Dated where possible.
- •On 2026 outlook: at least 23% constant-currency sales growth, implying at least CHF 3.44 billion at the March 2026 spot rates, with gross margin at least 63.0%. Source: On FY2025 results, March 3, 2026.
- •lululemon FY2026 outlook: net revenue $11.35 billion to $11.50 billion (2% to 4%). A beat or miss versus that band is the Americas-traffic test. Source: lululemon FY2025 PR, March 17, 2026.
- •ASICS FY2026 outlook: net sales ¥950 billion (+17%). Source: ASICS FY2025 financial summary, February 2026.
- •Nike FY2027 Greater China commentary as quarterly prints land. Management already flagged continued negative impacts from Greater China and Converse. Source: Nike FY2026 10-K.
- •Under Armour FY2027 gross-margin guide +220 to +270 bps, including about 150 bps from assumed IEEPA cost reversal. The first two quarters of FY2027 are the test of that assumption. Source: UA FY2026 Q4 release, May 12, 2026.
- •US replacement-tariff schedule after the February 2026 IEEPA ruling, as it applies to Vietnam, Indonesia, and China footwear. Source: VF FY2026 10-K.
What would change the view
Conditions or evidence that would invalidate the thesis or materially shift the risk picture.
- •Nike Greater China stabilizes. Two consecutive quarters of currency-neutral growth, with Direct traffic no longer the drag, would mean the China problem is cyclical rather than structural.
- •On apparel mix stalls below the mid-single digits of sales while shoe growth also slows. That would cap the specialist at a premium running brand rather than a sportswear platform.
- •HOKA quarterly growth falls into the mid-single digits while UGG remains the larger brand. Deckers would then trade as a lifestyle footwear company with a running overlay.
- •Anta other-brands growth reverts to ANTA's low-single-digit rate. The group would look more like a mature China sportswear incumbent than a multi-brand compounder.
- •lululemon Americas comparable sales turn sustainably positive without a gross-margin collapse. That would reopen the Direct-apparel compounding case.
- •A durable US duty stack on Vietnam and Indonesia footwear that is not offset by price or mix. Contractor geography would then be the binding constraint on Nike and the specialists alike.
- •Adidas brand momentum reversing in North America after the 2025 10% currency-neutral print. The number-two generalist would be back in a reset, not a recovery.
What we are not covering
Sub-areas, technologies, or companies we are deliberately excluding from the analysis, and why.
- •Fashion and luxury apparel (Tapestry, Ralph Lauren, LVMH fashion houses). Different consumer, different pricing power, different supply chain.
- •Specialty apparel retail (Gap, Abercrombie) and sporting-goods retail (Dick's, JD Sports, Foot Locker). Customers or adjacent retailers, not brands in this thesis.
- •Off-price (TJX, Ross). Overflow channel, not a brand roster.
- •Circana or NPD running unit-share percentages. Paywalled, not independently verified here.
- •Brooks Running (Berkshire), Crocs, Columbia, Amer Sports brand-level P&Ls except where Anta's stake is noted, and FILA Holdings Korea (separate from Anta's FILA China license).
- •The GLP-1 demand-shift thesis for apparel sizing and sports-bra demand. That lives on the GLP-1 Strategy tab. This sector cross-links it rather than rebuilding it.
Sources
Primary sources cited in this analysis. Links open in a new tab.
- Nike FY2026 Form 10-K (year ended May 31, 2026)Accessed 2026-08-17
- lululemon FY2025 Form 10-K (year ended February 1, 2026)Accessed 2026-08-17
- lululemon FY2025 results press releaseAccessed 2026-08-17
- Deckers FY2026 Form 10-K (year ended March 31, 2026)Accessed 2026-08-17
- Deckers FY2025 full-year resultsAccessed 2026-08-17
- On Holding FY2025 results (Form 8-K exhibit 99.1)Accessed 2026-08-17
- Adidas Annual Report 2025 income statementAccessed 2026-08-17
- Puma Annual Report 2025Accessed 2026-08-17
- Under Armour FY2026 Q4 and full-year resultsAccessed 2026-08-17
- V.F. Corporation FY2026 Form 10-KAccessed 2026-08-17
- Anta Sports 2025 annual results (HKEX)Accessed 2026-08-17
- Li Ning 2025 annual results (HKEX)Accessed 2026-08-17
- ASICS FY2025 consolidated financial summaryAccessed 2026-08-17
- New Balance Sustainability and Impact Report 2024Accessed 2026-08-17
- IRS yearly average currency exchange rates, 2025Accessed 2026-08-17
- CBP Uyghur Forced Labor Prevention ActAccessed 2026-08-17
- IQVIA: Outlook for Obesity 2026 (GLP-1 apparel adjacency)Accessed 2026-08-17
Audit trail
Record of the last review and what changed. Required on every refresh.
Last reviewed: 2026-08-17
Change log
- 2026-08-17Initial publication. Thesis, drivers, risks, and metrics sourced from Nike FY2026 10-K, lululemon FY2025 10-K, Deckers FY2026 10-K, On FY2025 8-K, Adidas Annual Report 2025, Puma Annual Report 2025, Under Armour FY2026 Q4 release, VF FY2026 10-K, Anta and Li Ning 2025 HKEX results, ASICS FY2025 financial summary, and IRS 2025 yearly average FX rates. Circana running share omitted on purpose.
Unresolved questions
- •Nike running-category dollars are not disclosed as a line. A primary category split would let the Running tab move beyond specialist revenues.
- •New Balance has not published 2025 sales. The 2024 $7.8B figure will go stale.
- •Adidas own-retail versus e-commerce dollar split is not in the 2025 HTML income statement, only percentage changes.
- •Confirm the post-IEEPA replacement tariff rates by origin country as Customs publishes them, rather than relying on company qualitative language.
- •Anta other-brands composition (Descente, Jack Wolfskin, and the rest) at the next interim, after the 59% 2025 jump.
- •lululemon footwear dollars inside accessories and other, once they become material enough to disclose separately.
