New Balance’s sales rose 19% last year to $9.2 billion, as the former sneaker giant continues to outperform the global footwear market and take market share from struggling rivals like Nike.
The 120-year-old privately held Boston-based shoe brand exclusively shared its 2025 results with CNBC. In addition to strong growth forecast for 2025, the retailer said it could hit its $10 billion annual revenue target by the end of the year.
“We’re competitive. There’s no doubt about that. But we want to make sure that as we get there and exceed that, the quality of our business comes first,” CEO Joe Preston told CNBC in an interview. “We don’t want empty calories here. We want to make sure we deliver on our goal of becoming a premium brand. Over the last five years, that’s exactly what we’ve done around the world.”
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Since 2020, New Balance has increased its sales by 180%, placing it among a handful of top competitors that oversized their businesses as Nike changed its business model and lost significant market share.
During the Covid-19 pandemic, Nike doubled down on its direct sales strategy, which cut off its longtime wholesale suppliers so the sneaker giant could expand through its own website and stores. Although 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.
By focusing so much on creating a direct sales model, which can be more complex than distributing to wholesalers, Nike has also fallen behind in innovation and lost its edge in the performance footwear market. This has created additional opportunities for competitors like New Balance.
Former Nike CEO John Donahoe previously blamed the retailer’s slowdown in innovation on remote working during the pandemic, but Preston said the global crisis created an opportunity for his team to come together in a way they never had before to implement new strategies.
“We met every Tuesday morning at 7:30, we still have that weekly meeting today, and it allowed us to launch a global offensive… we came out of Covid stronger than any other company in our industry,” Preston said. “The market disruption that’s taking place, the Nike examples, of course, all of that is real and at the same time, I don’t think that’s why we started to emerge.”
Preston said the company has stood out 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 was across a range of regions and categories and was fueled by an aggressive store opening plan which saw 80 new doors open in 2025 alone.
Although a vital source of revenue, store openings are expensive and take time to generate a return on investment. When asked, New Balance declined to share details about its profitability. It is therefore difficult to know to what extent these investments are weighing on its results and whether it will be able to maintain the strong growth from which it has benefited.
To develop its business after more than 100 years on the market, New Balance was inspired by Nike’s strategy. The company said a key driver of its growth was its ability to position itself as a premium brand, which was critical to Nike’s ability to become a roughly $50 billion powerhouse.
This means that New Balance is selective when it comes to distribution and discounts. The move allowed it to increase its average selling price by about 30% over the past five years, at a time when many competitors have had to rely on promotions to boost sales.
There was also good timing involved. Coming out of the Covid-19 pandemic, New Balance leaned on its “dad shoe” heritage from the 1990s, when ’90s styles were hugely popular with younger shoppers. This allowed it to capture a younger consumer base who didn’t grow up with shoes and shoppers who chose sneakers as a fashion statement – not just for playing sports or working out.
At the same time, the company has partnered with key athletes including Los Angeles Dodgers superstar Shohei Ohtani, tennis star Coco Gauff and Buffalo Bills quarterback Josh Allen, fueling the growth of its performance footwear business.
For the coming year, New Balance announced plans to expand its existing product lines, create new products and place more emphasis on performance sales.
It also wants to continue to increase its direct-to-consumer sales through the opening of stores in strategic areas. Although the direct sales strategy hasn’t worked out very well for Nike, Preston said he’s taking a different approach.
“One of the things we don’t do is establish a [DTC] target internally,” Preston said. “We want to make sure our goal is to present the best of ourselves and not make that the biggest part of our business. I don’t want to interfere with the way the consumer wants to shop. We want to make sure we allow the consumer to shop the way they want. We just want to look great.”