The sneaker boom had a long run. Now some analysts say it’s over

For practically 20 years, sports activities manufacturers benefited as individuals swapped out costume sneakers for sneakers when heading in all places from the airport to fancy eating places and even the workplace.

That’s been a boon for Adidas AG, Nike Inc. and Puma SE, which capitalized on shoppers’ altering tastes by serving up snazzy, cozy kicks that individuals wished to put on on and off the taking part in discipline. The rising demand for sports activities sneakers additionally underpinned the speedy development of challengers like Hoka and On Holding AG, which emerged within the wake of the monetary disaster and shortly grew to become common manufacturers.

Now the way forward for that longstanding sneaker boom is being referred to as into query, most notably by Bank of America analysts led by Thierry Cota. They rocked the footwear world final week with a 61-page evaluation concluding that the expansion prospects for these sports activities manufacturers are quickly dimming.

They argue that the sporting items sector had loved a 20-year “upcycle” that lifted sneakers from lower than a quarter of world footwear gross sales to at the least a half — a development that culminated in the course of the Covid pandemic, when hundreds of thousands of individuals had been instantly working from residence. “With this structural shift largely complete, prospects for future revenue growth are now significantly reduced,” the analysts stated.

They accompanied that view with a uncommon “double downgrade” of Adidas, abandoning their “buy” score and declaring the inventory one of many least enticing within the business.

Their competition that the sneaker boom has handed its peak prompted a backlash from skeptics who say the informal footwear development has room to run. Longtime business analyst Matt Powell, an adviser at consulting agency Spurwink River, conveyed that sentiment on LinkedIn, the place he posted a Barron’s article concerning the analysis and commented: “C’mon, man! No evidence of this.”

Adidas shares plunged as a lot as 7.6% in response to the downgrade on Tuesday, earlier than recovering a part of these losses by the top of the week.

Sneakers now make up about 60% of footwear gross sales within the US, in line with Beth Goldstein, an analyst at Circana in New York. Sport sneakers have gained over the inhabitants as a part of a wider societal push towards consolation, well being and wellness, priorities that in all probability aren’t going to vanish anytime quickly, she stated. The US sneaker class grew 4% final 12 months by November, whereas the style class dropped 3%, she added.

“The sneaker business is larger than ever,” she stated. “I wouldn’t even call casualization a trend — it’s just a key consumer preference.”

Yet the sneaker makers have run into headwinds because the pandemic as they often didn’t sustain with buyers’ fickle tastes, noticed gross sales cool notably in China, and confronted the specter of US tariffs. Shares of Adidas are down by nearly a third previously 12 months, and even On Holding’s inventory is down by greater than 10% within the interval, regardless of sturdy income development.

“We don’t believe the casualization trend is over — rather, it has stabilized, with wardrobes now more balanced,” stated Poonam Goyal, an analyst at Bloomberg Intelligence.

“The category has moved beyond the pandemic-driven demand spike and is now operating in a more normalized environment.”

There are indicators that sneakers are bleeding into the costume shoe class. In 2025, the top-traded idler on Stockx, a web-based resale platform, was the New Balance 1906L, which seems to be just like the offspring of a preppy boat shoe and a marathon coach. It’s additionally widespread as of late to see film stars and style influencers donning spiffed-up, costly variations of trainers, typically in collaboration with luxurious manufacturers like Gucci and Moncler.

The analysts at Bank of America didn’t recommend that individuals are going to ditch their sneakers for patent leather-based oxfords anytime quickly. Rather, they indicated that sporting items — after booming in the course of the pandemic — have since mid-2023 been rising at a slower-than-average tempo in contrast with the previous couple of a long time.

While that usually might imply the business is poised to take off once more, no large rebound is obvious, the analysts argued. They cited information starting from current bank card purchases to sluggish gross sales figures from Asian footwear and attire suppliers to less-than-bullish commentary from business leaders concerning the outlook for 2026.

If the sporting items business grew by a mean of about 9% a 12 months since 2007, as hundreds of thousands of individuals traded in costume sneakers for sneakers, the long run annual growth might solely be about 4% or 5%, they recommended.

Their optimistic take is that the business is in a extended stoop due to shoppers fearing financial situations and up to date stumbles at Nike. That might imply that the sneaker boom nonetheless has legs and can resurge as early as 2027.

“The alternative is much worse and more likely, in our view,” the Bank of America analysts added. “The emergence of a new, less favorable long-term industry paradigm.”