The record-setting deep freeze gripping the U.S. East Coast should boost earnings for outdoor-related retailers in early 2014, according to analysts.
Columbia Sportswear Co., Deckers Outdoor Corp. VF Corp. and Wolverine World Wide Inc. are expected to be the biggest winners of the bitter cold weather this month, as customers have been snapping up waterproof and insulated boots.
Chris Svezia, an analyst at Susquehanna Financial Group, lifted his fourth-quarter earnings estimates for outdoor-related brands in response to recent consumer behavior.
“After a solid fourth-quarter selling season and generally tight inventory levels for the first quarter, we believe retailers could look more favorably toward fall ’14,” he said.
Danny Wasserman, owner of Tip Top Shoes in New York, said the snowstorm last week boosted boot sales his store, noting that Sorel boots were the best seller across the board for men and women. “So far, January has been good to us. We’ve had to place many reorders because most vendors are out of boots,” he said.
Wasserman added that kids’ styles from Ugg Australia have been popular in recent weeks, in addition to women’s Pajar furry boots. And like many retailers, Wasserman said his inventories are running low after customers rushed to purchase outdoor boots ahead of the record-setting cold temperatures. “We’ve placed lots of reorders for Pajar, Sorel, Ara — whoever we could get boots from. SmartWool socks have been great sellers, too.”
Jeff Van Sinderen, an analyst at B. Biley & Co, pointed out that Ugg Australia and other boot brands have benefited from the deep freeze settling over the Northeast, but the drop in retail foot traffic has hurt business overall. “The cold weather impacts business in the near term. It prevents people from going shopping and walking into stores,” he said.
Ken Berk, owner of Boston-based Berk’s Shoes, said he expects business to remain strong even after the cold snap ends. “People don’t come out in the cold, but after the cold, we get busy,” he said, adding that waterproof and insulated boots are his store’s top sellers.
Cougar Boots and The North Face are two brands that have been popular for both men and women in his store. “We’ve had to reorder many times because of the weather,” Berk said.
While boots sales have been up, Berk admitted the record-setting freeze has hurt other parts of his business. “So far this month, we’re up and down: One day it’s busy and next day it’s very slow. We’ve also had a lot of online orders coming into the store from people who don’t want to leave home,” he said.
Kris Hartner, owner of Chicago-based Naperville Running Co., reported that foot traffic dropped significantly in his shop due after city officials urged people to stay indoors. “With the weather the way it’s been here, business has pretty well been at a standstill for us,” he said. “We’re open, but when [the customer is] being told not to leave the house because it’s a health hazard, we’ve seen a major drop in business in the past three days.”