According to analysis by GF Securities, although revenue growth for overseas footwear and apparel companies decelerated quarter-over-quarter in Q4 2025 and inventory-to-sales ratios increased, the clarity surrounding US tariff policies is expected to normalize ordering patterns from brand clients. This is anticipated to lead to an improvement in the performance of leading sportswear OEMs in 2026 compared to 2025. Furthermore, 2026 is a major year for sports, with events such as the Winter Olympics, the Men's FIFA World Cup, and the Asian Games likely to boost sales for overseas footwear and apparel companies, thereby stimulating order demand for leading sportswear OEMs. Long-term prospects for the sportswear industry remain strong due to its large market potential and high growth trajectory. Leading companies in the sportswear OEM sector possess wide economic moats, strong competitiveness, the capability for global production layout, and high-quality downstream clients, positioning them for steady long-term earnings growth.
Key viewpoints from GF Securities are as follows: In Q4 2025, overall revenue growth for overseas footwear and apparel companies slightly declined compared to Q3 2025. However, niche brands focused on segments like running and outdoor maintained high revenue growth. Gross margin performance was mixed, and most companies experienced an increase in expense ratios. Based on company financial reports: (1) In Q4 2025, brands such as On, ASICS, and Deckers Outdoor, which specialize in running and outdoor segments, sustained high revenue growth rates. Most overseas sportswear companies maintained positive revenue growth, except for Under Armour, Nike, Columbia Sportswear, and Puma. (2) By region: In Q4 2025, revenue growth for overseas sportswear companies in North America, EMEA/Europe, and Greater China was -3%, -1%, and 2% respectively. Growth rates were flat quarter-over-quarter in North America, declined in EMEA/Europe, and improved in Greater China. (3) By product category: Apparel sales demonstrated stronger resilience in Q4 2025, continuing the trend from Q3 2025. (4) Profitability: In Q4 2025, On, ASICS, adidas, Columbia Sportswear, and VF Corporation saw year-over-year improvements in gross margin, while others declined. Selling, general and administrative (SG&A) expense ratios decreased for On, Deckers Outdoor, adidas, ASICS, and VF Corporation, but increased for the remaining companies.
Inventory-to-sales ratios for most overseas sportswear companies increased quarter-over-quarter in Q4 2025, but overall inventory levels remain manageable. According to Wind data, the inventory-to-sales ratios for US apparel and accessory retailers in October, November, and December 2025 were 2.42, 2.02, and 1.30 respectively, while for wholesalers they were 2.03, 1.92, and 2.01. Despite some fluctuation, these ratios have returned to pre-pandemic 2019 levels. Bloomberg data indicates that, influenced by a weaker consumer environment, inventory-to-sales ratios for most overseas brands rose sequentially in Q4 2025. However, as of Q4 2025, except for Under Armour, Nike, Puma, and Columbia Sportswear, the ratios for other representative overseas sportswear companies remained below the 80th historical percentile, suggesting that inventory levels in the overseas sportswear industry are still under control.
Compared to fiscal year 2025, Under Armour, Puma, and Columbia Sportswear project an acceleration in revenue growth for fiscal year 2026. According to their financial reports, Deckers Outdoor, adidas, On, ASICS, and Lululemon anticipate a slowdown in revenue growth for FY2026 compared to FY2025, while Nike and VF Corporation have not disclosed revenue guidance for FY2026.
Risk factors include macroeconomic fluctuations, global supply chain tensions, and rising labor costs.