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These Footwear Players Look Good to Go

April 23, 2014 | About:
Suravi Thacker

Suravi Thacker

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The footwear retail industry has evolved over the years with each player innovating into new products. Despite conditions such as weakness in consumer confidence and budget consciousness of people, demand for footwear has been on the rise. This is mainly due to new products developed by most of the footwear retailers.

Even though the retail environment was weak during the holiday season, as a harsh winter kept customers at home, footwear retailers managed to do well and shine brightly through their strategic efforts.

Performance of the Industry Players

Some of the prominent players such as Nike (NKE), Deckers Outdoor Corp (DECK) and Wolverine World Wide (WWW), have performed greatly over the last five years. Their performance is well reflected in their share price during the same time period.

Deckers Outdoor Corp leads the pack with the highest stock price appreciation of 276.4% in the last five years whereas Nike and Wolverine World Wide stand at 170.4% and 149.7%, respectively. Deckers has been an exceptional performer, which was once again proved by its latest quarterly results which came in ahead of analysts’ expectations. Its revenue jumped 19.2% over last year to $736 million. This growth in revenue was driven by the success of its UGG brand, which witnessed a sales increase of 18% during the quarter. Even the e-commerce and the retail segment performed well, registering sales growth of 34% and 31%, respectively.

The company has been growing largely with new store openings in every quarter. It has also ventured into new markets and plans to expand its footprint in Japan as well as China. Also, it has taken initiatives to reduce its dependence on sheepskin by launching new products which do not require sheepskin in order to manufacture it.

Although Wolverine World Wide has appreciated the least among the three, the return looks decent enough to please any investor. Its biggest strength has been the acquisition of Performance and Lifestyle unit of Collective Brands. This buyout has more than benefitted the company by adding to its top line, which grew 13.6% in its recently reported quarter. Wolverine expanded its product portfolio not only through acquisition, but also through introducing new products. Additionally, it plans to introduce a fresh new apparel collection this year, which should add to its revenue.

Further, Nike has always been a customer favorite. It is long known for its innovative skills. Although its comfortable products are priced at a premium, customers are willing to buy it. New products such as Nike+ and technological advancements such as Flyknit technology have been quite beneficial for the shoemaker and should continue to attract customer attention.

Conclusion

Each footwear retailer is doing well with great quarterly numbers and innovative strategic moves. However, Deckers stands out of the lot because of its extraordinary performance. With the highest return to its investors, Deckers Outdoor has been able to win over investors’ hearts. Moreover, its blockbuster quarter and growing e-commerce segment makes it quite attractive. On the other hand, Wolverine and Nike continue to bring in new products to lure customers to its stores. Therefore, investing in any of these companies should make you rich.


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