NIKE, Inc. (NKE): This Company Could Be a Good Fit for Your Portfolio

In terms of China, Adidas is second to Nike in the country with an 11.2% market share. While Nike sales have slowed in the country, Adidas is actually growing revenue in China. Sales were up 6% in the first quarter of 2013.

An up and coming competitor to both companies is Skechers USA Inc (NYSE:SKX). CEO Robert Greenberg was also the founder of shoe company LA Gear. Skechers is best-known for its celebrity advertising.

Things are really starting to look up for Skechers USA Inc (NYSE:SKX). In the first quarter, sales increased 28.6% from the same quarter last year. The company returned to profitability and the outlook for this year is positive. Growth was seen across the board in domestic wholesale, international, company retail operations, and e-commerce.

Going forward, the company plans to open 28 to 32 stores in 2013. Skechers USA Inc (NYSE:SKX) sees growth in the international markets and I agree with that premise. The company continues to sign up new international distributors and is looking to gets its shoes into more markets. Skechers doesn’t have the global footprint of NIKE, Inc. (NYSE:NKE) or Adidas and that, to me, is where the growth is. Considering that Nike had revenue of $25.3 billion last year and Skechers had only $1.67 billion, there’s considerable room for Skechers to grow.

Foolish assessment

The market for these three companies continues to grow. Nike is the undisputed leader with its brand and celebrity athletes. Nike’s dominance is likely to continue. Even though Adidas is making some aggressive moves, the company is still trying to copy Nike’s playbook. Adidas is following the path Nike is on and is not leading. I’d much rather own the leader. Coming to Skechers, the company is more dependent on fashion trends and is not as diversified as Nike or Adidas.

However, the company offers the most upside in terms of growth. As Skechers expands internationally, there are tremendous opportunities to grow revenue and profit. For more conservative investors, I would stick with NIKE, Inc. (NYSE:NKE). For more aggressive investors, I would add Skechers into the mix as well.

The article This Company Could Be a Good Fit for Your Portfolio originally appeared on Fool.com and is written by Mark Yagalla.

Mark Yagalla has no position in any stocks mentioned. The Motley Fool recommends Nike. The Motley Fool owns shares of Nike. Mark is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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