NIKE, Inc. (NKE), Under Armour Inc (UA): Which of These Companies Will Run Faster?

The biggest positive noted by the German sports retailer was the margin growth that it saw. Gross margin was 50.1% and this was just the second time in the entire history of the company that it witnessed gross margins higher than 50%.

Adidas is witnessing good demand for its TaylorMade-Adidas Golf products which witnessed a 13% increase excluding currency effects. It is also trying to bridge the gap with Nike in China, where the two companies together hold around 50% of the market.

Like NIKE, Inc. (NYSE:NKE), Adidas stands to gain from the World Cup and the Olympics over the next couple of years. In the last World Cup the company had supplied the official ball.

Could there be a new angle?

As the two behemoths fight it out, there is another company which is keeping its eyes set on the running shoes market, and that is Under Armour Inc (NYSE:UA). The company, famous for its super hero tees, has already set up operations in Portland, which attracts shoe makers from across the nation. NIKE, Inc. (NYSE:NKE), Adidas, Columbia Sportswear, all have their establishments there.

Under Armour already has a 13.65% share of the U.S. sports apparel market according to SportsOneSource. It is slowly creating a niche in footwear, which is a focus area for its management and accounts for around 17% of sales.

The company is enjoying good demand for its lightweight Spine Venom running sneakers and football cleats, which fueled a 27% growth in footwear in the recently reported first quarter. It has been able to grow its market share to around 2% from 1.3% in 2012 according to SportsOneSource.

Summing up

The new generation of running shoes is making the market place exciting. It is a huge opportunity for manufacturers to generate long-term growth. The duel between NIKE, Inc. (NYSE:NKE) and Adidas would have solid bearing on their future prospects. Meanwhile, it would be interesting to see if smaller companies like Under Armour Inc (NYSE:UA) can come up with new innovations.

The article Which of These Companies Will Run Faster? originally appeared on Fool.com and is written by Eshna De.

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