Adidas Looks to Beat Nike for Soccer Dominance in 2014 World Cup
Nike has three of the highest-paid shoe deals for soccer players. with Christiano Ronaldo (No. 2, $8.4 million), Wayne Rooney (No. 9, $1.7 million) and Neymar (No. 10, $1 million). The Adidas F50 scored 761 goals in the top four leagues last season, the highest total for any soccer shoe. Nike's Mercurial shoe ranked second, with 740 goals.
Adidas has seen its soccer sales skyrocket recently, including impressive gains in Latin America, which will continue with a strong Argentina showing. In the recent first quarter, total sales were up 27%. Sales in Latin America were up 19%, including a gain of 50% in the market in that region. This follows a fourth quarter that saw sales up 35%, including a gain of 32% in Latin America.
Other items to keep an eye on are the recently revealed pre-cooling vests and sleeves. This Huffington Post article shows the design and more details. The items will be worn by players for Spain, Germany and Argentina at the 2014 World Cup. Players will wear them during warm-ups and possibly halftime to avoid the harsh conditions of summer in Brazil. I'm sure athletic apparel and performance specialist Under Armour (UA) will be watching. This is the type of item that could go viral during a game in a good or bad way.
The surprising company that could also have a good World Cup is Puma, which is majority-owned (84%) by Kering. Puma has three players on the top 10 shoe deals list, with Mario Balotelli (No. 3, $6.9 million), Cesc Fabregas (No. 5, $5.3 million) and Sergio Aguero (No. 8, $2 million). Puma is also the official shirt sponsor for Italy, Switzerland, Ivory Coast, Algeria, Cameroon, Ghana, Uruguay and Chile.I wrote about Puma stepping up its sports marketing efforts when it signed Jadeveon Clowney, who was the first player selected in the 2014 NFL draft. Puma continues to be on the comeback trail, and a strong World Cup could continue to strengthen the brand. In the first quarter of the fiscal year, Kering saw total revenue rise 4%. Puma saw 2013 sales of $3 billion, and only Gucci ($3.6 billion) contributed more to Kering. Puma made up 31% of total revenue, but only 11% of operating income, due to falling operating margins. Adidas shares have fallen close to 52-week lows and now look more attractive for investors who believe the brand can come back and fend off Nike. In the growing soccer market and in a year that includes a World Cup, there may be room for more than one soccer giant. In Adidas' case, here's hoping its large bets on players and teams pay off. At the time of publication, the author held no positions in any of the stocks mentioned. Follow @chriskatje This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff. >>Read More: Aegerion Stock May See a Resurgence After Hitting Bottom From Ongoing Controveries Why Amazon's Smartphone Needs More Than 3-D to Beat Apple's iPhone ECB Placebo; Beige Book: Best of Kass Good Luck Getting Profits In $4 Trillion Municipal Bond Market