With the European Cup underway, it might be worth considering how sports play a role in the broader perception of companies. Some companies, despite being relatively unknown, pour significant sums of money into marketing during major sporting events. Other stocks are directly linked to the sporting events, giving them a leg up in organic marketing and product placement.
While for most Americans, the European Cup does not change their perceptions about companies like BYD (OTCMKTS:BYDDF) and AliExpress (NYSE:BABA), Europeans still make up a generous portion of the global markets for sports and commercial stocks alike. Thus, keeping an eye on which companies successfully weave into the marketing of the European Cup can be a good clue as to their potential future performance in the short term.
As such, here are two sports stocks and one commercial stock that are likely to benefit from the increased exposure the European Cup is currently providing.
Adidas (ADDYY)
With the European Cup currently being held in Germany and the overall dominance of Adidas (OTCMKTS:ADDYY) sports products in central Europe, Adidas potentially has one of the best chances to gain market share from this year’s tournament. The company, which is known for its endorsement of star athletes and providing the kit for several European teams, including the Germans, has carved out a reputation for high quality, exceptional fashion, and overall success in the European market.
Now, with the release of several redesigned retro shoes, like the Samba and Gazelle, Adidas has also successfully broken into the casual sneakers market once more. The company’s products stand as an alternative to competitors’ more well-known branding by using unique colorways and materials to stand out.
From a financial standpoint, Adidas’ first-quarter earnings report provided general relief to many investors after it struggled with revenue and profit generation in 2023. With a 3.5% increase in revenue year over year and a quarterly net income of 170 million EUR, this sports stock seems headed in the right direction for a nice bump in share value should it repeat the results in the next earnings report.
Nike (NKE)
Another sneaker and sportswear giant, Nike (NYSE:NKE) has managed to outcompete Adidas for uniform visibility in the European Cup. Nike remains the most represented brand with nine teams (37.5%) compared to Adidas’ 6 teams (25%). This kit visibility extends beyond the European Cup and was the case for the last World Cup, where Nike dominated team branding as well.
In fact, Nike’s dominance extends beyond both world competitions into the club scene, where it sponsors several of the most elite and most followed clubs, such as Paris St. Germain, Real Madrid, and Chelsea.
Keep an eye on the Nike earnings call today, as it may clue investors into whether or not the company’s big push in organic professional sports marketing paid off this year. That said, Nike’s market dominance is not likely to erode so quickly that it cannot rebound.
Coca-Cola (KO)
Just like how summer and football (soccer) go hand-in-hand, so too does Coca-Cola (NYSE:KO) and major sports sponsorship. Despite Cristiano Ronaldo’s disdain for the company during the 2021 European Cup, which saw KO stock value dip 1.6% due to Ronaldo advocating for water over the soft drink at a press conference, Coca-Cola is back in full swing as a sponsor of this year’s European Cup.
Coca-Cola itself may not be the drink of choice for high-level athletes, but it certainly is the most popular soft drink in the world among those watching the tournament. Taking a look at Coca-Cola’s financials, we see steady performance so far this year with a generous growth of 9% in share value over the last six months.
Its first quarter results showed relatively positive metric growth in revenue, and net income, despite a slight decrease in profit margins. This trend is likely to continue into the next earnings report for the second quarter as Coca-Cola continues to focus on marketing expenses for the upcoming 2024 Paris Olympic Games.
On the date of publication, Viktor Zarev did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
