What does the future hold for the sporting goods industry in 2025 amidst a climate of uncertainty and constant change? Dive into our comprehensive analysis that shows chances for growth in a challenging economic landscape. We give a status update on the current situation and describe 6 opportunities
The situation: Consumers are saving – but not so much on sports
More than many other consumer goods industries, sporting goods have proven over the years to remain relevant to consumers in times of crisis. At least relative to the fashion industry, with which it is often compared.
Adidas is expecting an operating profit of around €1.2 billion in 2024, up from the previous forecast of around €1 billion. Sales are expected to increase by around 10 percent, with a target of high single-digit growth. Asics reported a 64 percent increase in operating profit in the nine months to Sept. 30. Hoka’s sales also rose by more than a third (34.7%) in the first two quarters of 2024, prompting parent company Deckers Brands to raise its forecasts. Shoe manufacturer Wolverine Worldwide was unable to report such good figures for the third quarter, with group sales actually falling. It’s Merrell that continues to drive growth in the quarter, albeit by only 1.4 percent. Nevertheless, Wolverine is also raising its guidance. “In the third quarter, we achieved better sales and profits than expected, led by Merrell and Saucony, which exceeded our forecast,” said Chris Hufnagel, the brand’s President and CEO. “We have achieved another quarter with a record gross margin and more than doubled our profits compared to the previous year.”
The situation in the fashion is quite different: French luxury goods group Kering SA continued its downward trend in the third quarter, reporting a 15 percent drop in sales from the previous year. Rival LVMH reported a 4 percent drop in third-quarter sales after a disappointing first half. And it’s not just the luxury sector that’s suffering.
H&M’s group sales fell by 3 percent in the third quarter. Third-quarter results for Zara’s parent company, Inditex, were stable but fell short of market expectations, sending its shares down by up to five percentage points.
Outlook 2025 – Six opportunities
- Positive sentiment in sports
- Sales drivers: Running, health and the fashion-sport fusion
- DTC or wholesale – Valuing all channels
- More innovation – No go without it
- Fitness on the rise
- Racquet sports continue to grow
1. Positive sentiment in sports
The reasons for the stable performance of sports companies became more than clear during the pandemic: “Economic conditions such as inflation and geopolitical uncertainties are currently dampening consumer sentiment, which could continue to have an impact next year. However, I believe that consumers will continue to be willing to invest in sports and active leisure. Especially in times of crisis, people look for positive, health-promoting activities, and sports offer exactly that,” says Tobias Gröber, Executive Director Business Unit Consumer Goods at Messe München.
Decision-makers in the sports industry are aware of this. According to the authors of The State of Fashion 2025, a study by the B2B fashion magazine Business of Fashion and McKinsey, the sportswear market will grow faster than the overall fashion market in key regions in 2023: by 2 to 3 percent in China, 5 to 6 percent in the US, and 2 to 3 percent in Europe. Only 20 percent of international fashion executives surveyed believe conditions will improve after 2024, while 41 percent expect them to remain the same and 39 percent expect them to worsen.
“The long-feared economic slowdown has arrived. Consumers, hit by recent high inflation, are increasingly price sensitive,” the report states. In contrast, sports industry executives are much more optimistic. Some 90 percent of sportswear companies predict stable or increasing sales in 2025.
2. Sales drivers: Running, health and the fashion-sport fusion
“Running and hiking remain strong. Outdoor sports are still an important and strong sales driver, even if they are slightly declining,” says Margit Gosau, CEO of Sport 2000 International and Managing Director of the seven-country alliance Sport 2000 GmbH, when asked about the trends for the coming year. “Running is our category with the lowest price erosion.”
The quarterly figures for brands such as Asics and Hoka also confirm that there is still a lot of potential in running – and trail running. “We continue to see a lot of momentum in the hiking and trail running segment, which is accessible to a lot of people, and the latter is very trendy,” says Felix Münnich, Chief Commercial Officer of Mammut Sports Group AG, pointing out that climbing and bouldering too are gaining importance. They are also moving into climbing and bouldering gyms, becoming an urban sport with lower barriers to entry than rock climbing.
Ski touring, on the other hand, Mammut considers more difficult. “Many consumers, especially in Europe, already equipped themselves well during the Covid crisis,” says Münnich. “They have not yet reached the point where they need to replace clothing and equipment on a large scale.”
According to the World Health Organization (WHO), 81 percent of the world’s children and adolescents are physically inactive, costing the world economy billions of dollars every year and burdening healthcare systems. Getting these people involved in sport is not only a challenge for our society but also a great opportunity for the sports industry.
ISPO’s Tobias Gröber also sees potential in the “softer health sports segments,” where wearables are gaining popularity for personalized training and health tracking. “We expect the health and wellness sector, especially the wearables and connected-health segments, to emerge as clear winners in 2025,” says Anja Wolf, Director Marketing, B2B & Cooperations at Polar. “Consumer interest in technology that enables personalized health and fitness monitoring continues to grow as people increasingly prioritize their physical and mental well-being. In our segment, we see particularly strong demand for wearables that provide accurate health-related data.”
The blurring of the lines between fashion and sports is driving growth in the sports industry. According to the State of Fashion report, two out of three Millennial and Gen Z shoppers wear athleisure apparel, such as leggings and sweatpants, several times a week. And for good reason. The more people recognize the importance of health and wellness in their lives, the more they want their lifestyles to reflect it. At the same time, they are growing accustomed to sportswear’s function and comfort. According to The State of Fashion 2025, this is true in all age groups, with 56 percent of Gen Z customers placing a very high priority on fitness. But older generations around the world are also becoming more active, as we can see from people’s vacations. The sports tourism sector is expecting 18 percent growth worldwide by 2030.
But the sports industry must pay attention: Sportswear’s appeal is encouraging fashion brands to expand in its direction. And there are other reasons for concern, like Prada’s collaboration with NASA to develop a spacesuit in October 2024!
3. DTC or wholesale – Valuing all channels
“We are firmly convinced that brick-and-mortar retail will continue to play an important role, as the personal experience and expert advice in the store offer something that is difficult to replace online,” says Polar’s Anja Wolf.
In fact, the growth potential of online retailing and DTC business has been overestimated, through the Covid-inspired the notion that there is no going back to wholesale. “Those who are pronounced dead tend to live longer,” says Margit Gosau of Sport 2000. “It was always said that small sports retailers were not that relevant. But the big brands were very much mistaken. In fact, there is a small renaissance of classic sports retailing.”
Not only have small retailers proven to be often more flexible and resilient, but the D2C-first strategy of some major brands has created opportunities for their overshadowed competitors. The space freed up on store shelves has needed filling, and brands like Hoka, Asics and New Balance have stepped into the void. These brands, called “challengers” to the big brands in The State of Fashion, have captured wholesale market share and are now building their own DTC businesses. Hoka, for example, opened its first US flagship store in New York in June.
At the same time, established brands that had cut back on traditional wholesale distribution are trying to restore it. However, they’re now facing more competition, because now DTC specialists too see the attractions of wholesale.
Lululemon, for example, used to generate 90 percent of its sales through its own channels but is now looking for partners and has teamed up with Zalando to expand its European distribution. US fitness brand Fabletics, which has sold only through its own, mainly digital channels since launching in Europe in 2014, is doing the same. “We have a lot of brand awareness in Europe, but the only way to get to know Fabletics has been through the website,” says Daniel Klarkowski, VP of Brand Marketing in Europe. The European business represents about 10 percent of the domestic market, where there are now about 100 stores. To accelerate growth, Fabletics is now entering the wholesale market. “We see great potential in working with retailers and serving the wholesale market,” Klarkowski says.
4. More innovation – No go without it
Innovations are significant when people are cutting back. “Of course, consumers will always pay close attention to the price/performance ratio of every purchase,” says Felix Münnich of Mammut. “That’s why it’s important to occupy the right, lower price points or offer strong innovations to justify higher prices. Mammut has made great strides in both areas in recent years, which is why we can look forward to 2025 with confidence.”
Technical innovation is in the DNA of the sportswear industry. But according to The State of Fashion, many brands have in recent years focused instead, and too much, on incremental product development. Innovations have not been visible enough, the authors argue, and have therefore attracted less attention from consumers.
This diagnosis is particularly true for Nike, but many other brands have innovated recently in sustainable materials, which tend to be hard to see and hard to understand. Meanwhile, challengers in the running-shoe sector have repeatedly come up with new looks, such as Hoka’s oversized sole constructions and On’s CloudTec soles.
With its own technologies, Skechers has seized the opportunity to move into performance sports. “We are in the early stages of team sports with the global roll-out of Skechers court, football, basketball and cleated styles with a growing roster of Olympians and elite athletes competing in our footwear,” says Robert Greenberg, Skechers’ CEO. “We believe there are significant opportunities to build on our technical performance business. While continued investment in product and marketing drove record quarterly sales, it is our commitment to deliver what consumers want that inspires us.”
That innovation has slowed in recent years is reflected in the number of patent applications. According to the study, patents granted in the sports industry decreased by 55 percent between the fourth quarters of 2021 and 2023.
5. Fitness on the rise
An evergreen is back: the desire to work out and join a gym. The HFA report predicts that the fitness industry will grow by 8.7 percent per year through 2030. What’s promising here is that many Gen Z and Millennial consumers in particular say they use fitness facilities. Athletic apparel and footwear companies should not miss out on this potential. According to Cognitive Market Research, the global fitness apparel market will end up being worth $14.2 million in 2024 and grow at a compound annual growth rate (CAGR) of 5.20 percent from 2024 to 2031.
6. Racquet sports continue to grow
Racquet sports continue to be a growth market driven by (1) padel, (2) pickleball and (3) tennis. Padel is growing fast, with a global market projected to grow at a CAGR of 6.8 percent from 2023 to 2030. Some estimates suggest it could reach $447 million by 2031, growing at a CAGR of 10.3 percent from 2023.
Pickleball not only has famous ambassadors, like former tennis champion Andre Agassi, but is likely to gain momentum – and not only in the US, with its 36 million players. Other countries will find it just as easy to play and just as social.
Tennis is not only well established and showing growth momentum but has, as Vogue Business has put it, already found a new ally in the world of luxury in 2024.
With Tenniscore the traditional sport has made a brilliant comeback and will continue to thrive in 2025.
