Sportswear companies are moving to clear out leftover inventory to make room for new product lineups ahead of a summer packed with major sporting events, but analysts say any sales benefit will likely take time.
With soccer’s European Championship in Germany and the Copa America in the U.S. coming up later this month, followed by the Paris Olympic Games between July and August, the likes of Nike, Adidas and Puma are expected to showcase new products and launch advertising campaigns.
Brands typically launch specific collections during major sports competitions given that consumers tend to be willing to pay a premium for them, a boon for the sportswear companies, Bryan Garnier analyst Cedric Rossi said.
Sports-apparel makers are trying to turn a page on a tough time marked by subdued consumer demand and intense promotional activity, with companies relying on discounts to offload inventory that piled up due to the Covid-19 pandemic and supply-chain snarls.
“These events come at the right moment for the industry,” Rossi said.
Companies held back on introducing new products until the second half of the year because the European Championship and the Olympics were coming back to back in the summer, Morningstar Research analyst David Swartz said.
The direct sales uplift on a global basis is likely to be relatively small, but the bigger benefit for companies is the increased brand exposure that can lead to higher sales of soccer boots, running shoes and apparel down the road, Deutsche Bank analyst Adam Cochrane said.
Adidas Chief Executive Bjorn Gulden said during an earnings call in March that this summer’s soccer competitions would have a bigger impact on sales than the Olympics, a view shared by analysts.
Jerseys of the soccer teams that perform well during such tournaments sell well, although the halo effect is much bigger, a spokesperson for the German sporting-goods company Puma said. “Many get inspired by the successes of their teams to start playing football themselves. We then see a positive effect on the sale of football boots after the tournament,” the company said.
British sneaker and fashion retailer JD Sports Fashion said sales of England soccer jerseys soared 35% in the first three weeks of May, compared with the same period before the prior Euros. Both home and away kits showed positive demand trends, the company said.
Whereas demand for soccer merchandise and products exists year-round all over the world, most of the sports that feature in the Olympics garner a small following among the public, Morningstar’s Swartz said. “People don’t watch the competition and buy an archery uniform,” he added.
For sporting-goods companies, the Olympic Games serve as a marketing opportunity to promote brands, but analysts say the impact of these efforts is difficult to measure and will likely take time.
The Olympics are less an event where fans buy a jersey and the market for gear like track-and-field spikes is also limited, but the credibility that the company gets as a sports brand from this competition is crucial, Puma said.
Adidas normally uses the Olympics to launch technologies and raise brand awareness, but it isn’t a commercial event for which consumers buy replica kits, Adidas’s Gulden said in the March earnings call.
Analysts differ on whether the companies’ performances during this busy summer could lead to changes in their financial projections.
Morningstar’s Swartz doesn’t think sales will be boosted enough to lift companies’ outlook as the effects of the events are already priced in. Companies’ results could depend more on whether or not consumer spending picks up and new products catch on with consumers, he said.
However, Bernstein analyst Aneesha Sherman sees room for guidance lifts if demand is good and the soccer tournaments go well.
Write to Andrea Figueras at andrea.figueras@wsj.com