Jock switch
Analysts predict results will improve in the U. S. athletic footwear sector in time for the back-to-school season, although the retail environment remains difficult. Fashion trends have shifted from higher- priced technical athletic footwear toward casual, lower-priced styles. In the 12 months ended April 30, athletic footwear sales fell 5 percent to $19.1 billion from $20.08 billion the prior year, according to the NPD Group.
Slower sales of high-end sneakers hurt retailers such as Finish Line Inc. (FINL) and Foot Locker Inc. (FL) while makers of casual-style shoes, such as Skechers Inc. (SKX), benefited.
Analysts say trends, however, are shifting back toward expensive shoes. “The athletic component is starting to see some improvement relative to the past two years,” says Susquehanna Financial Group analyst Christopher Svezia. Last month, Foot Locker reported an increase in sales of $100-plus basketball and running shoes.
Women’s running shoes will likely be the industry’s top performer, according to Svezia. Running shoes make up 25 percent of athletic footwear sales, he says.
He adds that innovation will likely drive back-to-school sales. “Traffic is down at most major malls and consumers aren’t buying as much footwear, but if an athletic shoe has innovative, technical attributes people will still buy it,” Svezia says.
