Overheard On Wall Street: Athletic Shoes Sales, Buzz on Crocs & Skechers

NikeLab Kim Jones Sneakers Collaboration Release
NikeLab Air Zoom LWP x Kim Jones sneakers.
Courtesy of brand.

July Athletic Shoe Sales

According to Citi Research analyst Kate McShane, who references data from SportScan, total U.S. athletic footwear point-of-sales increased 10.8 percent year-over-year in July, a deceleration relative to the 14.1 percent growth seen in the previous month.

July saw 23 percent unit growth and a 9.9 percent decline in average selling price for athletic footwear, McShane said, with casual athletic sales gaining 16.4 percent and basketball sales up 10.2 percent year-over-year. Running category sales grew 10.4 percent.

Meanwhile, category leader Nike closed the month with flat year-over-year sales growth. Brand Nike saw a 0.4 percent increase in sales, while Jordan dipped 2.8 percent and Converse gained 9.5 percent.

Crocs Inc.

Despite an “underwhelming” Q2, CL King & Associates analyst Steve Marotta said Wednesday that will maintain a buy rating on the stock as he continues to see turnaround potential.

“We remain constructive on the name as we believe this story is ‘turnaround-able,’ ” Marotta writes. “On a micro-level, management is executing on a number of initiatives, including, but not limited to, lowering SKU count, becoming deeper in key styles, improving on-time delivery metrics, managing inventory tightly, shortening product creation cycles and utilizing more impactful marketing tactics.”

Shares for Crocs Inc. declined double digits Wednesday when the firm reported Q2 sales and profit that significantly missed forecasts.

Crocs said its Q2 net income rose 21.1 percent, to $11.7 million, or 13 cents per diluted share, from $9.7 million, or 11 cents per diluted share in last year’s comparable period. But those results missed analysts’ expectations for diluted earnings per share of 18 cents. Meanwhile, second-quarter revenues fell 6.3 percent year-over-year, to $323.8 million, missing market watchers’ estimates for revenues of $348.5 million. On a constant-currency basis, revenue slid 6.2 percent.

Skechers USA Inc.

Citi Research analyst Corinna Van der Ghinst noted this week that the brand — which experienced a tougher-than-expected Q2 — is having an “impressive” Q3-to-date.

Referencing data from SportScan, Van der Ghinst noted that Skechers’ U.S. point-of-sales have increased 13 percent year-over-year in Q3-to-date, driven by high-teens unit growth and partly offset by a 3 percent decline in average selling prices.

“Results remain impressive given a 13.6 percent compare in July ’15, while Skechers continues to outpace total industry trends, which increased 11 percent on [a] 26 percent [gain in] units and 12 percent [decline] in [average selling prices],” Van der Ghinst wrote on Thursday. “Skechers’ U.S. market share increased 10 basis points year-over-year to 5.6 percent, consistent with management’s comments on holding share in a tough U.S. environment.”

She added, “The brand’s sell-through rates are trending well ahead of our 3.5 percent [growth] estimate and the street’s 1.0 percent [growth estimate] for U.S. wholesale in Q3.”