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Outbyte Driver Updater FREEScan for outdated or missing drivers - takes under a minuteDriver Scan →Outbyte PC Repair FREERepair Windows errors before they cause bigger problemsFix Now →Nike is trying to reset its product mix and strengthen wholesale while its owned digital business remains weak. Adidas, by contrast, reported growth across both wholesale and direct-to-consumer (DTC) channels in the first half of 2026. That points to different business conditions—not proof that one company has completed a recovery. The latest reports cover different periods, so their growth rates should not be treated as a like-for-like contest.
How Nike and adidas make money
Nike: an outsourced manufacturing model with owned and partner sales
Nike sells footwear, apparel and related products through NIKE Direct—its own stores and digital platforms—and wholesale accounts, including distributors, licensees and sales representatives. Nearly all Nike products are made by independent contractors. In other words, Nike owns the brand and directs product development and marketing, but relies on outside manufacturers to make almost all of its goods.
The company says its strategy is to lead with sport and innovation, build consumer connections and deliver experiences through digital channels and retail. The mix between its own channels and wholesale partners matters because a shift in sales can affect how products reach consumers, not just which logo appears on them.
adidas: a material role for wholesale alongside DTC
In FY2025, adidas reported that wholesale accounted for 60% of net sales and DTC for 40%; DTC includes its own retail and e-commerce. The company describes multi-brand distribution as important in several markets and categories. It says it works with retail partners on service, tailored assortments and in-store presentation, and monitors partner sell-through and inventory.
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Those FY2025 adidas channel shares are not directly comparable with Nike’s channel revenue changes: they describe different things, are from different reporting periods and may use different accounting definitions. They do, however, show why both companies’ relationships with retailers matter even as they invest in their own stores and online sales.
What the latest results say about recovery
The reporting periods differ: Nike’s latest reviewed results cover the three months ended August 31, 2026, while adidas’ latest reviewed results cover the six months ended June 30, 2026. The figures below describe each company’s reported period; they do not establish which business would have grown faster over the same three or six months.
| Measure | Nike | adidas |
|---|---|---|
| Latest period covered | FY2027 Q1, three months ended August 31, 2026 | H1 2026, six months ended June 30, 2026 |
| Revenue | $11.2 billion; down 4% reported and 5% currency-neutral in FY2027 Q1 | €13.335 billion; up 14% currency-neutral and 10% in euros in H1 2026 |
| Wholesale and owned-channel trend | Nike Brand wholesale revenue was $6.8 billion, down 1% currency-neutral; NIKE Direct was down 9% and digital sales down 13% currency-neutral in FY2027 Q1 | Wholesale grew 7% and DTC grew 23% currency-neutral in H1 2026; e-commerce grew 26% and own retail 21% |
| Operating profitability | Not stated for the latest reviewed quarter in the figures reported here | Operating profit was €1.279 billion, up 11%, with a 9.6% operating margin in H1 2026 |
Currency-neutral growth adjusts for exchange-rate movements; reported growth reflects the figures translated into the company’s reporting currency. The percentages are each company’s own reported results, not a matched-period comparison.
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Nike’s reset: wholesale improved before Direct
For the year ended May 31, 2026, Nike reported $46.4 billion in revenue, flat on a reported basis and down 2% currency-neutral. Wholesale revenue rose 6% on a reported basis for the year, while NIKE Direct fell 6%. In FY2027 Q1, the Direct decline continued: NIKE Direct was down 9% currency-neutral, including a 13% currency-neutral fall in digital sales. Wholesale was down 1% currency-neutral in that quarter, so the annual wholesale increase should not be read as proof that all channels were still improving in the latest period.
Nike describes its response as accelerating innovation, reducing supply of certain footwear products, returning Nike Brand Digital to a full-price platform, reinvesting in wholesale, improving physical retail presentation and investing in brand and sports marketing. It says additional Sportswear and Jordan actions will extend beyond FY2027, as will work in Greater China. Nike also says the actions have adversely affected revenue and profitability and are expected to continue doing so. A reset can therefore be strategically deliberate and still weigh on near-term results.
adidas’ growth: strong DTC, with performance and apparel leading
Adidas’ H1 2026 revenue grew 14% currency-neutral. DTC grew faster than wholesale, but both channels were up. Results also varied sharply by product: apparel revenue rose 33% currency-neutral, accessories 16% and footwear 2%. Performance grew 34%, led by Football, Running and Motorsport; Lifestyle grew 4%. The overall growth rate was not a uniform lift across every product category.
Adidas attributed performance to its product pipeline, strong sell-through, more locally relevant assortments, marketing, retailer relationships and greater DTC demand. It also said it took a conservative approach to wholesale sell-in in a promotional marketplace. That distinction matters: selling product to a retailer (sell-in) is not the same as the retailer selling it on to a consumer (sell-through).
Inventory, discounting and the quality of earnings
Different inventory choices carry different risks
Nike reported inventory of $7.8 billion as of August 31, 2026, up 5% from May 31, primarily because of product mix. Adidas reported H1 2026 inventory of €5.969 billion, up 13%, saying it prioritized product availability—including for the World Cup—over short-term inventory optimization. These balances are in different currencies and are measured at different dates; comparing their absolute amounts or percentage changes would not establish which company is managing inventory better.
Nike explicitly described using markdowns and wholesale support to clear inventory and make room for new products. Adidas said it maintained full-price sell-through while taking a conservative wholesale sell-in approach. These are different management choices, not a simple contest in which lower inventory always signals strength: clearing older products may help Nike make room for a reset, while adidas’ higher stock reflects a stated choice to have products available. Each strategy carries the risk that demand or sell-through will disappoint.
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Do not read Nike’s FY2026 fourth-quarter margin in isolation
Nike’s reported gross margin in FY2026 Q4 was 49.2%. The company said it included an approximately 900-basis-point benefit tied to expected recovery of IEEPA tariffs. That unusual benefit makes the quarter a poor stand-alone measure of underlying margin recovery.
Adidas reported a 51.8% gross margin in H1 2026, little changed year over year, despite tariff and currency headwinds. The two margin figures above are not directly comparable: one is Nike’s fourth-quarter figure affected by a specified tariff-recovery benefit, while the other is adidas’ six-month figure. Duration and unusual items matter when judging how durable operating performance may be.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Geography and the limits of company-wide growth
In Nike FY2027 Q1, Greater China, EMEA and Converse were sources of weakness, partly offset by North America. Adidas reported H1 growth across regions, including Greater China, while Europe grew more slowly. Those disclosures are for different periods, and a regional company result does not mean that every category, market or consumer in that region moved in the same direction.
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What to watch next
For Nike, look for evidence that the reset is working
- Whether wholesale and new-product sell-through strengthen without relying on continued markdowns to clear older stock.
- Whether Nike Brand Digital returns to a full-price platform and Direct sales stabilize.
- Whether revenue and profitability recover as Sportswear, Jordan and Greater China actions continue beyond FY2027.
- Whether reported margins improve without a repeat of the specified tariff-recovery benefit that affected FY2026 Q4.
For adidas, test whether growth remains healthy
- Whether growth broadens beyond apparel and Performance, given the much slower H1 footwear increase.
- Whether retailer sell-through can support continued wholesale growth without heavier discounting.
- Whether elevated inventory helps meet demand, including for the World Cup, without creating excess stock, working-capital pressure or a need for deeper promotions.
- Whether operating profit holds up as the company invests in marketing and navigates tariff and currency effects.
On July 30, 2026, adidas raised its FY2026 currency-neutral revenue-growth outlook to 9–10%, from high-single-digit growth, and kept its expected operating profit at around €2.3 billion. That was management guidance, not a realized result or a guarantee. Adidas CEO Bjørn Gulden said the quarter’s 14% growth and €574 million operating profit demonstrated current strength, while also noting €212 million more marketing spend. Like Nike CEO Elliott Hill’s statement that Nike had taken decisive actions to strengthen its foundation and reposition for long-term growth, Gulden’s remarks are management assessments—not independent evidence that a recovery is complete.
How to read the comparison
The evidence supports a clear contrast in the latest available disclosures: Nike was still reporting falling revenue and Direct sales while executing a reset; adidas reported growth across DTC and wholesale, with particularly strong apparel and Performance results. It does not support a simple same-period ranking, because Nike’s latest report covers three months and adidas’ covers six. For an investor, the more useful question is whether each strategy converts into durable consumer demand and operating profit: Nike must show that the reset revives full-price sales, while adidas must show its growth and product availability do not turn into excess inventory or discounting.
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