Why is Adidas so Expensive?

The Black Friday deals were a better buy.

Andrew Willis 10 December, 2021 | 4:58AM
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Andrew Willis: Black Friday discounts are a thrill to find as a consumer. But how about from an investor’s standpoint? You might be more excited about moving inventory and covering overhead…

If you’re a sportswear maker like Adidas (ADDDF) right now and you’re headed into the winter season, your margins are under pressure, says equity analyst David Swartz. You’re recovering from widespread store closures across Asia Pacific, your transportation costs are high, and your factories in Vietnam are finally re-opening after a four-month closure thanks to the Delta variant.

And then you have the whole forced labour allegations and the backlash from Chinese consumers. Margins won’t be the problem if sales there go from an estimated 11% increase to an 11% decrease.

For Morningstar, I’m Andrew Willis.

 

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
adidas AG258.01 USD2.64
adidas AG ADR127.14 USD-0.40Rating

About Author

Andrew Willis

Andrew Willis  is Senior Editor at Morningstar Canada. He previously produced content for Fidelity Investments and finance industry events for Euromoney Institutional Investor and has written in the past for Thomson Reuters and CNN. Follow him on Twitter @Andrew_M_Willis.

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