Great ResignationInflationSupply ChainsLeadership

Why Nike Is Down and Adidas Is Up

June 12, 2017, 3:00 PM UTC

The Germans are sports stars—they’re the reigning World Cup champions, they dominated the most recent Olympics, and lately they’ve been running laps around the sportswear competition too.

Retro activewear is back in fashion, and that’s good news for Germany’s shoe giants Adidas and Puma. Sales of Adidas’s classic Superstar rose sixfold in 2016—making it the top-selling active shoe in the U.S., a distinction that had been held by a product from Nike (which still sells more shoes overall) for over a decade. To boot: Adidas’s Stan Smith sales increased fivefold, and Puma’s Clyde and Suede sneaks are booming.

“The fashion cycle we are in, which is casual and retro, plays to their sweet spot,” says Matt Powell, NPD Group’s sports industry analyst.

Adidas Stan Smith sneakersPhoto: Courtesy of Adidas
Photo: Courtesy of Adidas

For a full year, Adidas’s North America sales growth outpaced its competitors Nike (NKE) and Under Armour (UAA). During the latest quarter, Adidas’s sales soared 31% to $1.1 billion, and its CEO, Kasper Rorsted, promises growth will outstrip the rest of the U.S. market again in 2017. Puma, for its part, has posted a double-digit sales increase in the Americas region for three consecutive quarters.

North America’s “Big Three” aren’t at the top of their game: Nike is lamenting hefty discounts by retailers, Under Armour was hurt by Sports Authority’s bankruptcy, and Lululemon Athletica’s store traffic has dipped. But Germany’s winning streak may not last: The most recent numbers suggest that sales have cooled for both Adidas’s Superstar and Stan Smith. In both fashion and sports, there’s always next season.

A version of this article appears in the June 15, 2017 issue of Fortune with the headline “Watch Out, Nike, the Germans Are Coming.”