Market Overview

2016 Footwear Industry Recap: Retro Classics Grew 26% On The Year

Share:
2016 Footwear Industry Recap: Retro Classics Grew 26% On The Year

The U.S. athletic footwear industry closed a solid 2016, generating over $17.5 billion in sales, a 3 percent increase year-over-year. The classics category had a standout year, experiencing 26 percent growth while generating $4.4 billion in sales.

Companies with a strong classics portfolio performed well over the year include adidas AG (ADR) (OTC: ADDYY), which logged a 62 percent gain in 2016, and Puma AG Rudolf Dassler Sport (ETR: PUM), which clocked a 45 percent gain on the year.

Unit sales also increased by 3 percent, while average selling price stayed flat at $60.81.

Although Nike Inc (NYSE: NKE) possesses a strong classics portfolio, a slowing performance footwear category heavily weighed on the company in the past year.

Under Armour Inc (NYSE: UA) (NYSE: UAA) lack of retro footwear due to its recent entrance into the footwear business also poses a threat to the company. Under Armour is set to release its fourth-quarter earnings report after the close on Tuesday.

Consolidations In The Space

A consolidation of sporting good industry has put some pressure on footwear sales for in the short term.

"The Sports Authority and Sports Chalet bankruptcies certainly shook the industry, with the greatest impact hitting in the fourth quarter, when both retailers were fighting for their survival. It is likely that we will still see the impact continue through the first quarter, but after that the drag should be over and trend should return to normal," said NPD Matthew Powell.

In a recent exclusive interview, Powell indicated that he believes the current trends will continue.

“I think in footwear, adidas continues to have a very strong run. I think Nike recovers, but Nike is so huge in the U.S., they are never going to put up the kind of increases that the much smaller adidas and Pumas are putting up,” said Powell.

Powell also believes higher footwear prices will be seen after the United States is completely withdrawn from the Trans-Pacific Partnership.

Posted-In: Matthew Powell NPD Sports ChaletEarnings News Previews Trading Ideas Interview Best of Benzinga

 

Related Articles (NKE + ADDYY)

View Comments and Join the Discussion!

This Time Around, 20% Of Earnings Conference Calls Have This In Common

Chipotle On Trump's Border Tax: Not Worried 'Until And Unless This Comes To Pass'