The sneaker boom lasted a long time. Now some analysts say it's over

For nearly two decades, sports brands benefited as people traded in dress shoes for sneakers when heading everywhere, from the airport to fine dining restaurants and even the office.

That's been a boon for Adidas AG, Nike Inc. and Puma SE, which capitalized on changing consumer tastes by offering stylish, comfortable sneakers that people wanted to wear on and off the field. Rising demand for athletic footwear also underpinned the rapid growth of rivals such as Hoka and On Holding AG, which emerged in the wake of the financial crisis and quickly became popular brands.

Now the future of that long sneaker boom is being questioned, especially by Bank of America analysts led by Thierry Cota. Last week they shook the footwear world with a 61-page analysis concluding that the growth prospects for these sports brands are rapidly fading.

They argue that the sporting goods sector had enjoyed a 20-year “up cycle” that lifted sneakers 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 suddenly began working from home. “With this structural change virtually complete, prospects for future revenue growth now narrow significantly,” the analysts said.

They accompanied that opinion with a rare “double downgrade” of Adidas, abandoning their “buy” rating and declaring the stock one of the least attractive in the industry.

His claim that the sneaker boom has passed its peak sparked a backlash from skeptics who say the casual shoe trend has room to continue. Longtime industry analyst Matt Powell, an adviser to the consulting firm Spurwink River, conveyed that sentiment on LinkedIn, where he posted Barron's article about the investigation and commented: “Come on, man! There's no evidence for this.”

Adidas shares plunged as much as 7.6% in response to Tuesday's downgrade, before recouping some of those losses by the end of the week.

Sneakers now account for about 60% of footwear sales in the United States, according to Beth Goldstein, an analyst at Circana in New York. Sneakers have caught on as part of a broader societal push toward comfort, health and well-being — priorities that aren't likely to go away anytime soon, he said. The US sneaker category grew 4% last year through November, while the fashion category fell 3%, he added.

“The sneaker business is bigger than ever,” he said. “I wouldn't even call casualization a trend; it's just a key consumer preference.”

However, sneaker makers have run into headwinds since the pandemic, as they have at times failed to keep up with buyers' fickle tastes, seen sales cool particularly in China and faced the threat of U.S. tariffs. Adidas shares have fallen by almost a third in the past year, and even On Holding shares have fallen more than 10% in the period, despite strong revenue growth.

“We don't think the casualization trend is over; rather, it has stabilized and wardrobes are now more balanced,” said Poonam Goyal, an analyst at Bloomberg Intelligence.

“The category has overcome the increase in demand caused by the pandemic and now operates in a more normalized environment.”

There are signs that sneakers are moving into the dress shoe category. In 2025, the most traded loafer on Stockx, an online resale platform, was the New Balance 1906L, which looks like the descendant of a preppy boat shoe and a marathon shoe. It's also common nowadays to see movie stars and fashion influencers sporting expensive, upgraded versions of sneakers, often in collaboration with luxury brands like Gucci and Moncler.

Bank of America analysts didn't suggest people will trade in their sneakers for patent leather Oxfords anytime soon. Rather, they indicated that sporting goods, after its surge during the pandemic, has been growing since mid-2023 at a slower-than-average pace compared to the past two decades.

While that might normally mean the industry is ready to take off again, much of a rebound is not in sight, analysts argued. They cited data ranging from recent credit card purchases to sluggish sales figures from Asian footwear and apparel suppliers to less than optimistic comments from industry leaders about the outlook for 2026.

If the sporting goods industry has grown by an average of about 9% annually since 2007, as millions of people traded in dress shoes for sneakers, future annual expansion may only be about 4% or 5%, they suggested.

His optimistic view is that the industry is in a prolonged slump as consumers fear economic conditions and Nike's recent stumbles. That could mean the sneaker boom is still going strong and will resurface as early as 2027.

“In our view, the alternative is much worse and more likely,” the Bank of America analysts added. “The emergence of a new, less favorable long-term industrial paradigm.”