The Casual Footwear Boom Is Over. It’s Bad News for Adidas.

The boom in casual footware ushered in by the pandemic has ended, a potential problem for companies such as Adidas that benefited from the shift to less formal clothing, Bank of America says.

The casual footwear business has been on the ropes since mid-2023 as people began returning to office.

Analyst Thierry Cota wrote that while most downcycles have lasted one to two years over the past two decades or so, the current one is different.

It “shows no sign of abating” and there is “no turning point in sight,” he said.

Adidas and Nike alone account for almost 60% of revenue in the casual footwear industry, Cota estimated, so the sector’s slower growth could be especially painful for them as opposed to brands that have a stronger performance-shoe segment. Adidas may just have it worse than Nike.

Cota downgraded Adidas stock to Underperform from Buy on Tuesday and slashed his target for the stock price to €160 (about $187) from €213. He doesn’t have a rating for Nike stock.

Shares of Adidas listed on the German stock exchange fell 4.5% Tuesday to €162.25. Nike stock was down 1.2%.

Adidas didn’t immediately respond to a request for comment.

Cota sees trouble for Adidas both in the short and long term.

Adidas’ lifestyle segment, which includes the Gazelles and Sambas brands, has been one of the company’s fastest-growing business, but there are signs growth is waning.

Lifestyle sales increased at a 10% annual pace in Adidas’ third quarter, down from 13% in the second quarter.

The analyst now predicts Adidas’ organic sales will grow by a 5% annual rate starting in 2027, down from his prior forecast of 7.5%.

The slower revenue growth will likewise weigh on profitability, Cota said, predicting that margins on earnings before interest and taxes will decline back toward the company’s long-term average after several quarters of outperforming. That could result in a cut to earnings per share.

Adidas stock had a rough 2025. Shares shed 33% in the past 12 months, weighed down by investor concerns over how tariffs, slowing demand, and increased competition would affect revenue growth.

Nike stock fell 9% throughout the period, reflecting both the company’s struggles with demand and optimism over a turnaround plan CEO Elliott Hill rolled out in late 2024.

Investors’ confidence has faded following Nike’s December earnings report, which suggested that a sustained recovery is still several quarters away. Just how many remains anyone’s guess.

But if Adidas’ challenges continue, as Cota believes they will, it could open up some space for Nike to claw back any market share it lost to its rival.

Investors should keep in mind, however, that the field has grown increasingly crowded in the past five years. Upstarts such as On Holding and Hoka also present a formidable challenge to the sector’s legacy brands.

Shares of On and Deckers Outdoor , Hoka’s parent company, fell 11% and 48%, respectively, in 2025, but analysts are upbeat about both companies’ fundamentals as the new year begins.

The battle of the sneakers is just getting started.

LVMH Moët Hennessy Louis Vuitton wrapped up last year’s final quarter with sluggish sales growth, a sign that shoppers weren’t splurging on its collections of high-end garments and handbags in the run-up to the holiday season.

The French luxury-goods giant posted fourth-quarter sales of 22.72 billion euros ($27 billion), up 1% organically. Analysts had forecast €22.59 billion in sales and an organic decline of 0.3%, according to Visible Alpha.

LVMH’s fashion and leather goods division, which houses brands like Louis Vuitton and Dior, contributed €10.16 billion in sales, down 3% organically.

Sales at perfumes and cosmetics declined 1%, while the wines and spirits division reported a 9% contraction in sales. Selective retailing, the unit behind Sephora, fared better, with a 7% increase in sales, while watches and jewelry logged 8% growth.

For LVMH and the wider luxury-goods sector, the final quarter represents a key test of customers’ willingness to indulge on nonessential items in the run-up to Black Friday, Thanksgiving and Christmas.

Earlier this month, British trench-coat maker Burberry Group , Italian luxury-fashion house Brunello Cucinelli and Cartier owner Cie. Financière Richemont all reported higher sales for the quarter, raising the bar for industry bellwether LVMH.

Weak sales growth shows that LVMH’s collections aren’t appealing to clients and that the group is still contending with a slowdown in spending for luxury goods that has plagued the industry for years.

Demand weakened considerably after a postpandemic boom, especially among less affluent shoppers. The downturn has been particularly acute in China—a key market for LVMH and its rivals—as shoppers there have been holding back spending.

Last year brought a dose of uncertainty for LVMH and the sector as it took several months for the European Union to reach a trade deal with the U.S. after President Trump announced his Liberation Day tariffs.

Luxury goods are particularly sensitive to trans-Atlantic trade frictions and the specter of tariffs has never fully disappeared despite that trade deal.

Last week, LVMH and other luxury stocks slumped after Trump threatened 10% levies on various European countries he said were opposed to a U.S. takeover of Greenland. He subsequently called off those tariffs.

LVMH closed 2025 with €80.81 billion in annual sales, down 1% organically. Analysts had forecast €80.65 billion in 2025 sales with a 1.8% organic decline, according to Visible Alpha.

The group said revenue declined in Europe in the second half of the year, while the U.S. benefited from solid demand.

Sales in Japan were down from 2024, but the company said it had seen a noticeable improvement in trends in the rest of Asia, citing a return to growth in the second half of the year.

In an earnings call, executives expressed confidence for 2026 despite an uncertain geopolitical and macroeconomic environment, saying the positive trends they started to see in the second half were still there.

Net profit slid 13% on year to €10.88 billion, while profit from recurring operations fell 9% to nearly €17.76 billion. Analysts had forecast net profit of 10.55 billion euros and profit from recurring operations of €17.15 billion, according to Visible Alpha.

The group said it would propose a dividend of €13 a share at its shareholders’ meeting on April 23, the same as the previous year.

The Casual Footwear Boom Is Over. It’s Bad News for Adidas.

The pandemic-fuelled love affair with casual footwear is fading, with Bank of America warning the downturn shows no sign of easing.

French luxury-goods giant’s results are a sign that shoppers weren’t splurging on its collections of high-end garments in the run-up to the holiday season.