For nearly two decades, sports brands benefited as people swapped out dress shoes for sneakers when heading everywhere from the airport to fancy restaurants and even the office.
That’s been a boon for Adidas, Nike and Puma, which capitalised on consumers’ changing tastes by serving up snazzy, comfy kicks that people wanted to wear on and off the playing field. Rising demand for sports shoes also underpinned rapid growth of challengers like Hoka and On Holding, which emerged in the wake of the financial crisis and quickly became popular brands.
Now the future of that longstanding sneaker boom is being called into question, most notably by Bank of America analysts led by Thierry Cota. They rocked the footwear world last week with a 61-page analysis concluding that the growth prospects for these sports brands are rapidly dimming.
They argue that the sporting goods sector had enjoyed a 20-year “upcycle” that lifted sneakers from less than a quarter of world footwear sales to at least a half – a trend that culminated during the Covid pandemic, when millions of people were suddenly working from home. “With this structural shift largely complete, prospects for future revenue growth are now significantly reduced,” the analysts said. They accompanied that view with a rare “double downgrade” of Adidas, abandoning their “buy” rating and declaring the stock one of the least attractive in the industry.
Their contention that the sneaker boom has passed its peak prompted a backlash from sceptics who say the casual footwear trend has room to run.
Longtime industry analyst Matt Powell, an adviser at consulting firm Spurwink River, conveyed that sentiment on LinkedIn, where he posted a Barron’s article about the research and commented: “C’mon, man! No evidence of this.”
Adidas shares plunged as much as 7.6% in response to the downgrade on Tuesday, before recovering part of those losses.
Sneakers now make up about 60% of footwear sales in the US, according to Beth Goldstein, an analyst at Circana in New York. Sport shoes have won over the population as part of a wider societal push toward comfort, health and wellness, priorities that probably aren’t going to disappear anytime soon, she said. The US sneaker category grew 4% last year through November while the fashion category dropped 3%, she added.
“The sneaker business is larger than ever,” she said. “I wouldn’t even call casualization a trend – it’s just a key consumer preference.”
Yet sneaker makers have run into headwinds since the pandemic as they sometimes failed to keep up with shoppers’ fickle tastes, saw sales cool particularly in China and faced threat of US tariffs. Shares of Adidas are down by almost a third in the past year, and even On Holding’s stock is down by more than 10% in the period, despite strong revenue growth.
“We don’t believe the casualization trend is over – rather, it has stabilised, with wardrobes now more balanced,” said Poonam Goyal, an analyst at Bloomberg Intelligence. “The category has moved beyond pandemic-driven demand spike and is now operating in a more normalised environment.”
There are signs that sneakers are bleeding into the dress shoe category. In 2025, the top-traded loafer on Stockx, an online resale platform, was New Balance 1906L, which looks like the offspring of a preppy boat shoe and a marathon trainer. It’s also common these days to see movie stars and fashion influencers donning spiffed-up, expensive versions of trainers, often in collaboration with luxury brands like Gucci and Moncler.
The analysts didn’t suggest that people are going to ditch their sneakers for patent leather oxfords anytime soon. Rather, they indicated that sporting goods, have since mid-2023 been growing at a slower-than-average pace compared with the past couple of decades.
While that typically could mean the industry is poised to take off again, no big rebound is apparent, analysts argued. They cited data ranging from recent credit card purchases to sluggish sales figures from Asian footwear and apparel suppliers to less-than-bullish commentary from industry leaders regarding the outlook for 2026.
