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Sneakernomics: Second Quarter Performance for the U.S. Athletic Footwear and Activewear Markets

Aug 14, 2017
Matt Powell, Vice President, Industry Analyst ;
Sports

The calendar was kinder to the second quarter than the first, but challenges still remain in the athletic footwear and activewear space.

While the overall Q2 sales trend (April-June) in athletic footwear was actually better than Q1, it had more to do with calendar shifts than an actual improvement. The late Easter benefited April sales, which were up in the high single-digits. Both May and June sales declined, which is setting the stage for potentially poor back-to-school results.

Looking at the quarter overall, men’s and kids’ athletic footwear sales were down in the mid-single digits, while women's grew in the low singles. Looming over is the slowdown in sneaker purchases by Hispanics, which is impacting sales this year. In terms of channel performance, shoe chains and department stores both grew their sales. Athletic specialty/sporting goods declined, as a result of what I’ve said will be the last quarter where we feel the heat of The Sports Authority comparison.

In terms of category performance, classics, which had been growing at a stifling pace, slowed to a low teens increase. Adidas classics were essentially flat as key franchises are now post-peak. Nike grew by more than one-third in this category, and Puma increased sales in the mid-single digits. Casual athletic has become the hot category these last few months, leading the pack in Q2 with sales up nearly 50 percent. Market share leader Adidas is clearly exploiting this strong fashion trend. Other categories that experienced growth include outdoor/water sandals and sport slides.

Basketball footwear has not rebounded, with sales down in the high teens for Q2. All the major brands in this space took a hit. The struggle in running continues, with Q2 sales down in the high singles. All the major technical running brands continue to see a decline in sales. Nike running was soft, as new initiatives have not had much impact. Adidas was a bright spot for the category, as its running sales more than doubled. Other categories that saw sales decline were cleated products and hiking/light hiking footwear.  

By brand, Adidas and Puma were among the top gainers in Q2, while Nike, Brand Jordan, Converse, and Under Armour saw sales decline. Nevertheless, the Nike brands continue to dominate the top-selling list. The top-selling styles of Q2 were Nike Air Huarache, Nike Tanjun, Jordan XI Low, Converse All Star OX Low, and Adidas Superstar.

Activewear sales for the quarter were also down, in the low single-digits. The men’s market declined in the low singles, while women’s was flat and kids’ grew in the low singles. Sales grew at department stores and national chains, while the athletic specialty/sporting goods channel declined.

Looking at some of the bigger categories in the market, knit shirts, active bottoms, socks, and sport bras all experienced a sales decrease. One of the biggest gainers was sweatshirts, with sales up over 20 percent.

Private label remains a hot story, as retailers are trying to escape the extreme promotional environment caused by changes in brands’ ad policies. Sales of private label activewear grew during the second quarter.

In terms of major brand performance, Adidas, Fruit of the Loom, and Hanes experienced sales increases while Nike and Under Armour sales were soft.

Two important seasons – back-to-school and holiday—close out the year and sway overall annual sales. I expect this back-to-school to be the most promotional one in 20 years, and for sales to be soft. Holiday will likely also be challenged, but hopefully not to the same degree.

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