Messi to Miami shakes up competition for athletic brands, retailers

This article was written by Supply Chain Analysts Sanjay Ravi, Jon Pilarski, Jacob Wesseltoft, and Jeremy Klicka and Equities Data Analyst Keith Gerstein. It appeared first on the Bloomberg Terminal.

Background

Lionel Messi’s multi-year contract with Inter Miami of Major League Soccer is creating an impact on and off the pitch. Messi’s arrival is already raising ticket prices for MLS games, with more star signings likely as the U.S., Canada and Mexico prepare to host the 2026 men’s World Cup.

Analyst estimates suggest sales of Messi’s pink Inter Miami jerseys will push Adidas AG’s brand revenue growth above Nike Inc., Puma SE and Under Armour Inc. in the coming years. Messi could help Adidas speed its transition to sustained profitability.

The impact on streaming revenues for MLS co-sponsor and broadcaster Apple Inc. will take longer to measure. Inter Miami’s billionaire owner, Jorge Mas, estimates that Messi could bring in 2 million overseas accounts to Apple TV+ within 18 months.

The Issue

Analysts estimate Adidas’ revenue to grow between 9% and 10% per year in 2024, 2025 and 2026, a faster pace than Nike, Puma and Under Armour. That’s a reversal from 2022, when Adidas revenues declined 5.6% as it ended its partnership with Kanye West and Yeezy LLC.

Analysts are increasing their 12-month price target for Adidas, although not as quickly as the share price has rallied. Adidas announced that it sold $437 million of Yeezy products in the second quarter as the company continues to work through inventory from the canceled collaboration.

Adidas earns 39% of its revenue from its own direct-to-consumers sales. Kohl’s Corp., Foot Locker Inc., Target Inc. and Dick’s Sporting Goods Inc. are among its biggest U.S. brick and mortar retailers.

Adidas gained 48% this year, while Footlocker and Target faced declines. Dick’s, which is offering pre-sale orders for official Messi jerseys to be available in October, has returned 17% over the same period. Meanwhile, Kohl’s, which currently offers lower-priced Messi Adidas-themed T-shirts, has gained 13%.

Messi, meanwhile, will get a share in jersey sales as part of the MLS sponsorship deal and could also benefit from any increase in international accounts for Apple TV+.

Tracking

Use Bloomberg’s KPIC, ANR, SPLC and COMP to analyze equities. Run NSUB FFMSTORY to subscribe to functions-focused stories.

To compare estimates for Adidas’ brand revenue growth to peers:

• Type “adidas” in the command line and select ADS GR Equity from autocomplete.
• Now type “key performance indicators” and select KPIC. The shortcut is ADS GR Equity KPIC <GO>.
• Set the amber Periodicity box at top left to Annuals.
• At the bottom of the Brand Revenue menu at left, click Show All Peers, then click the chart icon to the left of YOY Growth for NIKE Inc., Adidas AG, Puma SE and Under Armour Inc.

For more information on this or other functionality on the Bloomberg Professional Service, click here to request a demo with a Bloomberg sales representative. Existing clients can press <HELP HELP> on their Bloomberg keyboard.