(Bloomberg) — For nearly two decades, sports brands benefited from switching from dress shoes to sneakers, which were worn on a variety of occasions, from the airport to fancy restaurants and even the office.
This was a big boon for Adidas, Nike and Puma, who capitalized on changing consumer tastes by offering stylish, comfortable sneakers that people wanted to wear on and off the playing field. Rising demand for athletic shoes has also supported the rapid growth of competitors such as Hoka and On Holding AG, which emerged after the financial crisis and quickly became popular brands.
Now, the future of this long sneaker boom is being questioned, mainly by analysts at Bank of America, from the team led by Thierry Cota. They shook the footwear world last week with a 61-page analysis concluding that the growth prospects for these athletic brands are rapidly diminishing.
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They argue that the sporting goods sector has enjoyed a 20-year “boom cycle” that has taken sneakers’ share from less than a quarter of global footwear sales to at least half — a trend that culminated during the Covid pandemic, when millions of people were suddenly working from home. “With this structural change largely complete, prospects for future revenue growth are now significantly reduced,” the analysts said.
They followed up that view with a rare “double downgrade” of Adidas, abandoning their “buy” recommendation and declaring the stock one of the least attractive in the sector.
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The claim that the sneaker boom is past its prime has sparked a backlash from skeptics who say the casual footwear trend still has room to grow. Matt Powell, a veteran industry analyst and consultant at the firm Spurwink River, expressed this opinion on LinkedIn, where he published a Barron’s article about the research and commented: “Come on, man! There’s no evidence of that.”
Adidas shares plunged as much as 7.6% in response to Tuesday’s downward revision, before recovering some of those losses by the end of the week.
According to Beth Goldstein, an analyst at Circana in New York, sneakers now represent about 60% of US footwear sales. Athletic shoes have caught on with the population as part of a broader social movement toward comfort, health and well-being, priorities that aren’t likely to disappear anytime soon, she said. The sneaker category in the US grew 4% last year through November, while the fashion footwear category fell 3%, he added.
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“The sneaker market is bigger than ever,” she said. “I wouldn’t even say casualization is a trend — it’s simply a fundamental consumer preference.”
However, sneaker makers have struggled since the start of the pandemic, as they have at times failed to keep up with changing consumer tastes, seen sales cool, particularly in China, and faced the threat of US tariffs. Adidas shares have fallen by almost a third over the past year, and even On Holding shares have fallen more than 10% over the same period despite strong revenue growth.
“We don’t believe the casual clothing trend is over — on the contrary, it has stabilized, with wardrobes now more balanced,” said Poonam Goyal, an analyst at Bloomberg Intelligence. “The category has overcome the pandemic-driven peak in demand and is now operating in a more normalized environment.”
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There are signs that sneakers are infiltrating the dress shoe category. In 2025, the most traded loafer on StockX, an online resale platform, was the New Balance 1906L, which looks like a hybrid between a classic boat shoe and a marathon running shoe. It’s also common to see movie stars and fashion influencers wearing sophisticated, expensive versions of sneakers, often in collaborations with luxury brands like Gucci and Moncler.
Bank of America analysts haven’t suggested that people will trade in their sneakers for patent leather oxfords anytime soon. Instead, they indicated that sporting goods – after a boom during the pandemic – have been growing at a slower rate than the average of the last two decades since mid-2023.
While this would normally mean the sector is about to take off again, no sign of a major recovery is evident, analysts argued. They cited data ranging from recent credit card purchases to weak sales figures from Asian footwear and apparel suppliers, as well as less-than-optimistic comments from industry leaders regarding the outlook for 2026.
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If the sporting goods industry has grown an average of about 9 percent a year since 2007, with millions of people ditching dress shoes for sneakers, future annual expansion could be just 4 percent or 5 percent, they suggested.
Their optimistic view is that the industry is in a prolonged recession due to consumer fears about economic conditions and Nike’s recent stumbles. This could mean that the sneaker boom still has momentum and will resurface as early as 2027.
“The alternative is much worse and more likely, in our opinion,” the Bank of America analysts added. “The emergence of a new, less favorable long-term sectoral paradigm.”
© 2026 Bloomberg LP
