(MENAFN- AsiaNet News)

• Data from Telsey Advisory Group during Black Friday showed that Adidas, Nike and On were offering discounts in line with last year's majorly. 
• The data from earlier this week showed that Nike did not offer a 30% extra discount, which it had run last Black Friday. 
• In November, On CEO Martin Hoffmann said in an interview with Stocktwits that the company will not drive sales through discounting but through full price.

Over the last few years, sneaker companies have tried to heavily discount in an attempt to attract customers, but this Black Friday, they painted a different picture by reducing discounts, limiting deals, or, to an extent, offering none at all.

The shift clearly reflects a broader strategy. These companies are pushing shoppers toward full-price purchases and aiming to win market share from sneaker enthusiasts who prioritize innovation in sports and running shoes and are less price-sensitive.

Data from Telsey Advisory Group showed that Adidas, Nike, and On offered discounts largely in line with last year. At Adidas, online promotions of up to 60% off select items matched last year's levels. Nike, meanwhile, offered up to 50% off, slightly below the 60% it ran last year, as the company continues to scale back online promotions.

A Strategy To Counter Trump Tariffs?

The full-price strategy has also been part of the sportswear companies' efforts to overpower tariffs imposed by U.S. President Donald Trump on global trading partners, mainly Vietnam and Indonesia, which are the biggest manufacturers for Nike, On, and Adidas.

Adidas in late October said that U.S. import tariffs will have a direct impact of 120 million euros on its operating profit in 2025, with the biggest impact felt in the holiday quarter.

In September, Nike said that with the new rates in place, the company expected the gross incremental cost to be about $1.5 billion on an annualized basis, up from the $1 billion the sportswear maker shared 90 days ago.

On Holding said during its November earnings call that the timing gap between its U.S. price increases and the full impact of additional tariffs resulted in a slightly positive margin effect in the third quarter. The company has not provided an estimate of the overall impact of this year's duties.

Federer-Backed On's Strategy

In November, On CEO Martin Hoffmann said in an interview with Stocktwits that the company will not drive sales through discounting but through full price during the holiday season and just being relevant for the customer.

“If you look into the third quarter, we actually decreased the share of discounted items,” Hoffmann told Stocktwits. The company has been eating into the market share of Nike and Adidas through its innovative product lines and comfortable running shoes, which have drawn in sneaker heads.

For Black Friday, On offered up to 40% off last season's styles, the same as last year, according to Telsey Advisory Group. Analysts and investors have viewed On as an emerging global brand that has been able to sell shoes at full price while maintaining brand momentum without discounts.

In late November, Piper Sandler said it models mid-teens growth for On in 2025 and low double digits in 2026, which is impressive given a more promotional competitive set and the company's commitment to staying full price.

Truist Securities said that the company continues to see no pushback on price increases and expects full-priced momentum to continue during the holiday season.

Nike's New CEO Eyes Reviving Lost Glory

Last year, Nike named Elliott Hill as its new CEO to turn the struggling company around after several quarters of weakness and a loss of market share to the likes of Hoka and On. Nike had fallen back on innovation, and its strategy of focusing on direct-to-consumer sales alone, rather than on wholesale relationships, resulted in weaker demand.

After taking the helm and during his first call in December last year, Hill noted a need to cut down on promotions as part of his turnaround plan and that the online business is required to move back to a“a full-price model.”

Telsey's data from earlier this week showed that Nike did not offer a 30% extra discount, which it had run last Black Friday. The company also chose to offer 30% off $200 products, whereas last year it offered 25% off $150 and 30% off $200.

Nike CFO Matthew Friend said in September that the company has been making headway in repositioning Nike Digital, reducing the number of days of site-wide promotion by more than 50%, lowering markdown rates, and increasing the share of demand at full price.

Wells Fargo said in November that the visibility into Nike's sales and margins "is finally improving." The company has been in a negative estimate revision cycle for three years, but this will reverse over the next six to nine months, the firm said, adding that the "material green shoots" in Nike's innovation and the belief that headwinds to the business are set to dissipate. 

Nike's Margins Squeeze From Discounting Now Fading. Source: The Fly

What Is Retail Thinking?

Retail sentiment on Nike has dipped to 'bearish' when compared to the 'bullish' territory a year ago, with message volumes at 'low' levels, according to data from Stocktwits.

Sentiment on Adidas was in the 'bearish' territory compared to the 'neutral' a day ago, while on On Holding, the sentiment has remained unchanged in the 'bearish' territory compared to a day ago.

Shares of On have declined over 17% this year, Nike's shares have lost 14% of their value, and U.S.-listed shares of Adidas have fallen nearly 25% year-to-date.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

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