Step outside, and you’ll see more people hitting the trails, joining fitness classes, and embracing an active lifestyle. Whether it’s hiking, running, or pickleball, sports participation is booming, and so is the demand for high-performance athletic wear.
As people increasingly prioritize fitness, leading brands like adidas AG (ADDYY), Skechers U.S.A., Inc. (SKX), and G-III Apparel Group, Ltd. (GIII) are seizing the opportunity, delivering cutting-edge innovations to meet evolving consumer needs.
Consumers today aren’t just looking for stylish activewear; they want breathable, sweat-wicking apparel that enhances movement, prevents injuries, and adapts to different environments. This growing shift toward an active lifestyle is propelling the global sportswear market to climb from $220 billion in 2025 to $350 billion by 2032, expanding at an annual rate of 7.8%.
Much of this surge comes from the increasing involvement of people in fitness activities. According to a report, sports participation is expected to increase by one billion people in 2025, reaching 3.5 billion worldwide. This makes sports the second most popular leisure activity after travel.
At the same time, women are engaging in sports like never before. Global revenues from women’s sports have tripled (300% growth) over the past three years, surpassing $1 billion in 2024. A Deloitte survey found that 99% of brand decision-makers have ramped up their investments to capitalize on this momentum. Unlike traditional male-driven engagement, female fans are more likely to buy merchandise and amplify brands on social media, creating viral buzz and expanding exposure.
With all these factors working in favor of the sportswear sector, investing in top-performing brands could prove to be a winning move. Now, let us dive into the fundamentals of three Athletics & Recreation stocks, starting with the third choice.
Stock #3: Skechers U.S.A., Inc. (SKX)
SKX designs, develops and markets a diverse range of lifestyle and performance footwear, apparel, and accessories for men, women, and children. The company operates through two segments: Wholesale and Direct-to-Consumer. It offers products under the Skechers USA, Skechers Sport, Skechers Active, Modern Comfort, etc.
On January 21, 2025, SKX launched its first-ever Skechers Performance store at West Edmonton Mall in Canada, offering an interactive shopping experience with half-courts for testing its innovative athletic footwear. This move reinforces the company’s commitment to performance-driven footwear, catering to athletes across various sports.
Additionally, last December, the company strengthened its presence in Europe by opening a flagship store in Prague’s High Street Na Příkopě. This centrally located store is designed to attract both locals and tourists, further broadening its market reach.
Such expansions highlight SKX’s strategic focus on experiential retail and international growth, positioning the brand for stronger consumer engagement and sales momentum.
SKX’s trailing-12-month gross profit and net income margins of 53.15% and 7.13% are 41.5% and 69.4% higher than the 37.56% and 4.21% industry averages, respectively. Likewise, its trailing-12-month ROCE of 15.42% is 43.7% higher than the industry average of 10.72%.
For the fiscal fourth quarter (ended December 31, 2024), SKX’s sales increased 12.8% year-over-year to $2.21 billion, while its gross profit rose 13.1% from the year-ago value to $1.18 billion. Net earnings attributable to SKX increased 13.9% and 16.1% from the prior-year quarter to $99.33 million and $0.65 per share, respectively. Also, its earnings from operations stood at $165.50 million, up 27% year-over-year.
Street expects SKX’s revenue for the fiscal first quarter (ending March 2025) to increase 7.9% year-over-year to $2.43 billion, and its EPS is expected to come in at $1.17 in the same period. For the fiscal year 2025, its revenue and EPS are projected to register a year-over-year growth of 8.9% each, reaching $9.77 billion and $4.53, respectively.
SKX’s shares have gained 8.6% over the past three months and 12.1% over the past year to close the last trading session at $64.10.
SKX’s stance is apparent in its POWR Ratings. The stock has a B grade for Value. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
It is ranked #5 out of 33 stocks in the Athletics & Recreation industry. In addition to the POWR Ratings highlighted above, you can check SKX’s ratings for Growth, Momentum, Stability, Sentiment, and Quality here.
Stock #2: G-III Apparel Group, Ltd. (GIII)
GIII designs, sources, and markets women’s and men’s apparel internationally. The company operates through two segments: Wholesale Operations and Retail Operations.
Last year, on July 29, GIII increased its stake in All We Wear Group (AWWG) from 12% to 19%, strengthening its global expansion strategy. AWWG, which owns brands like Pepe Jeans London, Hackett, and Façonnable, operates across 86 countries with over $650 million in revenue.
As part of the partnership, AWWG is now the official agent for DKNY, Donna Karan, and Karl Lagerfeld in Spain and Portugal, boosting G-III’s European market presence. Additionally, the company aims to leverage AWWG’s established presence in India to accelerate the expansion of its brands, particularly DKNY.
In terms of the trailing-12-month net income margin, GIII’s 5.59% is 32.8% higher than the 4.21% industry average. Likewise, its 8.30% trailing-12-month levered FCF margin is 77.9% higher than the 4.66% industry average. Also, its 6.24% trailing-12-month Return on Total Assets is 66.8% higher than the 3.74% industry average.
For the fiscal third quarter that ended October 31, 2024, GIII’s net sales increased 1.8% year-over-year to $1.09 billion. Its adjusted EBITDA for the period was $174.36 million. The company’s non-GAAP net income attributable to GIII and non-GAAP net income per common share were $116.29 million and $2.59, respectively.
The consensus EPS estimate of $0.96 for the fourth quarter (ended January 31, 2025) represents a 26.4% improvement year-over-year. The consensus revenue estimate of $808.59 million for the same quarter indicates a 5.7% increase from the prior-year period. The company has an impressive earnings surprise history, surpassing the consensus EPS estimates in each of the trailing four quarters.
Over the past six months, the stock has gained 21.3% to close the last trading session at $29.72.
GIII’s POWR Ratings reflect solid prospects. It has an overall rating of B, which translates to a Buy in our proprietary rating system.
It has an A grade for Value and a B for Growth. Within the Athletics & Recreation industry, it is ranked #4. Click here to see GIII’s ratings for Momentum, Stability, Sentiment, and Quality.
Stock #1: adidas AG (ADDYY)
Based in Herzogenaurach, Germany, ADDYY designs develops, produces, and markets athletic and sports lifestyle products globally. It offers footwear, apparel, accessories, and gear, such as bags and balls. Moreover, the company sells its products through its physical retail stores, wholesale, and e-commerce channels.
ADDYY’s trailing-12-month gross profit margin of 49.72% is 32.4% higher than the industry average of 37.56%. Its trailing-12-month levered FCF margin of 9.01% is 93.2% higher than the sector average of 4.66%. Likewise, the stock’s asset turnover ratio of 1.18x is 17.6% higher than the industry average of 1.00x.
For the fiscal 2024 third quarter that ended September 30, ADDYY’s net sales increased 7.3% year-over-year to €6.44 billion ($6.75 billion). Its gross profit rose 11.7% from the year-ago value to €3.30 billion ($3.46 billion). Additionally, net income attributable to shareholders grew 70.9% from the prior year’s quarter to €443 million ($464.43 million), while EPS from continuing operations increased 74.8% year-over-year to €2.44, respectively.
Recently, ADDYY reported strong preliminary Q4 2024 results, with revenue surging 24% year-over-year to €5.97 billion ($6.25 billion) and gross margin expanding 5.2 percentage points to 49.8%. The company achieved an operating profit of €57 million, a sharp turnaround from the €377 million loss in the prior-year quarter.
For the full year, ADDYY posted double-digit revenue growth (+12% currency-neutral) and improved its operating profit by over €1 billion ($1.05 billion), reaching €1.34 billion ($1.40 billion). The final 2024 financial results and 2025 outlook will be released on March 5, 2025.
Analysts expect ADDYY’s revenue for the fourth quarter (ended December 2024) to increase 19.5% year-over-year to $6.21 billion. The company’s revenue for the fiscal year 2025 is expected to grow 11.9% year-over-year to $27.20 billion. Moreover, the company topped the consensus revenue estimates in each of the trailing four quarters.
The stock has gained 42.2% over the past year to close the last trading session at $135.54.
It’s no surprise that ADDYY has an overall rating of B, which equates to Buy in our proprietary rating system. It has a B grade for Growth and Stability. Out of 33 stocks in the same industry, it is ranked #3.
Beyond what is stated above, we have also given ADDYY ratings for Value, Momentum, Sentiment, and Quality. You can get all ADDYY ratings here.
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ADDYY shares were trading at $133.32 per share on Tuesday afternoon, down $2.48 (-1.83%). Year-to-date, ADDYY has gained 9.49%, versus a 3.98% rise in the benchmark S&P 500 index during the same period.
About the Author: Shweta Kumari
Shweta's profound interest in financial research and quantitative analysis led her to pursue a career as an investment analyst. She uses her knowledge to help retail investors make educated investment decisions.
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