Shoe Stocks Worth Considering Despite The Market Slump

Shoe Stocks Worth Considering Despite The
Although shoe stocks continue to track the declines of the market as a whole, analysts rate many of them a firm buy.
Getty Images.

It’s been a sea of red across major stock indexes and shoe stocks Thursday morning.

But what else is new?

The U.S. stock market — spooked by China’s struggling economy and concerns about the Federal Reserve and its interest rate decision — has been experiencing its share of lulls over the past few months.

Meanwhile, investor sentiment has taken quite the hit following a 10 percent-plus decline in U.S. stocks in August, signaling an entrance into correction territory and causing alarm. Add in a statement by the Fed that it will maintain the current interest rate since “recent global economic and financial developments may restrain economic activity somewhat,” and market watchers are in a total funk.

At 11 a.m. EDT Thursday, the Dow Jones Industrial Average shed nearly 250 points, or 1.51 percent, to 16,033.40; the Nasdaq lost 74.97 points, or 1.58 percent, to 4,677.77; and the S&P 500 dipped 27.16 points, or 1.40 percent, to 1,911.60.

While most major footwear stocks were also in the red Thursday — Nike Inc.’s share price dived 1.57 percent, Skechers U.S.A. Inc. lost 2.40 percent and Caleres decreased 2.21 percent — experts remain bullish on footwear and many of its publicly traded firms.

Below are three top-performing stocks investors are upbeat on.

Foot Locker Inc.

Buy-rated by: Sterne Agee CRT analyst Sam Poser, Susquehanna Financial LLLP analyst Christopher Svezia (positive), UBS Investment Bank analyst Michael Binetti, Citi Research analyst Kate McShane.

Why analysts are bullish: “Foot Locker continues to outperform peers and the broader retail environment on strong management execution (continued under new CEO Dick Johnson’s leadership) and merchandising. Despite investor concerns over Foot Locker’s peak operating margins, management continues to drive stronger gross and operating margins on disciplined inventory management, digital growth, and higher in-store conversion rates, while making further progress on initiatives to improve apparel and women’s.” — McShane

Recent key stats: Net income for the second quarter, ending Aug. 1, 2015, was $119 million, up 29 percent from the comparable quarter; total sales increased 3.3 percent year-over-year, to $1.7 billion.

Under Armour Inc.

Buy-rated by: Sterne Agee CRT analyst Sam Poser, Citi Research analyst Kate McShane.

Why analysts are bullish: “Under Armour continues to be our No. 1 pick for long-term growth investors. … We believe the power and management of the Under Armour brand is the catalyst for strong results and a very healthy stock multiple. The company has been patient and methodical in managing the growth of the brand by only entering the proper channels and having the proper investment ahead of any channel/geography expansion.” — Poser

Recent key stats: Net income decreased 17 percent in the second quarter, ending June 30, 2015, to $15 million. Net revenues increased 29 percent year-over-year, to $784 million.

Nordstrom Inc.

Buy-rated by: UBS Investment Bank analyst Michael Binetti, Cowen & Co. analyst Oliver Chen (outperform).

Why analysts are bullish: “We believe Nordstrom is positioned to outperform department store peers over the 2H15. … Nordstrom is effectively integrating its businesses through service, customer experience, differentiated product, and capabilities. … The 2Q strength with young customers (fastest-growing categories) demonstrates Nordstrom is future-proofing its business to attract the millennial customer base. In addition, mobile is a core component for holiday omnichannel leadership, and we believe ongoing mobile enhancements, such as buy-to-text and personalized mobile pages, provide a richer experience.” — Chen

Recent key stats: Nordstrom’s net income for the second quarter, ending Aug. 1, 2015, totaled $211 million, a 15 percent gain from $183 million in the comparable quarter. Revenues totaled $3.6 billion, a 9.2 percent year-over-year gain.