Why New Balance's 'dad shoes' are beating Nike as sales surge 19%

In this articleNew Balance sales grew 19% last year to $9.2 billion as the legacy sneaker giant continued to outperform the global footwear market and take share from floundering competitors like Nike.The 120-year-old Boston-based footwear brand, which is private, exclusively shared its 2025 results with CNBC. In addition to the sharp 2025 growth, the retailer said it could reach its goal of $10 billion in annual revenue by the end of the year."We're competitive. No question about it. But we want to make sure that as we get there and surpass it, that the quality of our business is first and foremost," CEO Joe Preston told CNBC in an interview. "We don't want empty calories here. We want to make sure that we are delivering upon the premise that we have, which is to become a premium brand. Over the past five years, we've done exactly that around the globe." Since 2020, New Balance has grown sales by a staggering 180%, placing it among a handful of standout competitors that supersized their businesses as Nike changed its business model and lost significant market share.During the Covid-19 pandemic, Nike doubled down on its direct selling strategy that cut off longtime wholesale suppliers so the sneaker giant could grow through its own website and stores. While the strategy briefly boosted sales and promised higher margins, it opened up critical shelf space at strategic retailers that companies like New Balance, Brooks Running, On and Deckers rushed to fill. With so much focus on building out a direct selling model, which can be more complex than distributing to wholesalers, Nike also fell behind on innovation and lost its edge in the performance footwear market. That created further opportunity for competitors like New Balance. Nike's former CEO, John Donahoe, previously blamed remote work during the pandemic for the retailer's innovation slowdown, but Preston said the global crisis created an opportunity for his team to come together in ways they hadn't previously to implement new strategies. "We met every Tuesday morning at 7:30 a.m., we still have that meeting weekly today, and it allowed us to get on a global offense … we came out of Covid stronger than any other company in our industry," said Preston. "The marketplace disruption that's been taking place, the examples of Nike, sure, all that stuff is real and at the same time, I don't think it's the reason that we have begun to emerge." Preston said the company has stood apart from competitors and taken market share by focusing on "staying in front of the consumer" and how, when and where people want to shop. The chief executive said New Balance's growth came across a range of regions and categories, and was fueled by an aggressive store-opening plan that saw 80 new doors opened in 2025 alone. While they are a critical revenue driver, store openings are costly and take time to show a return. When asked, New Balance declined to share details about its profitability, so it's unclear how much these investments are weighing on its bottom line, and whether it'll be able to keep up the high growth it has enjoyed.To build up its business after more than 100 years on the market, New Balance took a few cues out of Nike's playbook. The company said a key driver of its growth has been its ability to position itself as a premium brand, which was critical to Nike's ability to become a roughly $50 billion powerhouse.That has meant New Balance being selective with both distribution and discounting. The move has allowed it to increase its average selling price by about 30% over the last five years at a time when many competitors have had to lean on promotions to drive sales.There was also some good timing at play, too. Coming out of the Covid-19 pandemic, New Balance leaned on its heritage as a 1990s "dad shoe" when styles from the '90s were extremely popular with younger shoppers. That allowed it to win over a younger consumer base that didn't grow up with the shoes and shoppers who chose sneakers as a fashion statement – not just for sports or working out. At the same time, it partnered with key athletes, including Los Angeles Dodgers two-way superstar Shohei Ohtani, tennis star Coco Gauff and Buffalo Bills quarterback Josh Allen, which has fueled growth in its performance footwear business. For the year ahead, New Balance said it plans to grow its existing product lines, build out new products and put a bigger emphasis on performance sales. It also wants to continue growing its direct-to-consumer sales through store openings in strategic areas. While the direct selling strategy didn't go so well for Nike, Preston said he's taking a different approach. "One of the things we're not doing is establishing a [DTC] target internally," said Preston. "We want to make sure that our goal is to show up the best and not have it be the biggest part of our business. I don't want to get in the way with how the consumer wants to shop. We want to make sure that we are enabling the consumer to shop how they want to shop. We just want to show up great." Got a confidential news tip? We want to hear from you.Sign up for free newsletters and get more CNBC delivered to your inboxGet this delivered to your inbox, and more info about our products and services.© 2026 Versant Media, LLC.

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