Sneakernomics - U.S. athletic footwear & apparel Q3 results

Sports retail under COVID-19 has been a roller coaster, and the Q3 (July-September 2020) results continue to show this bumpy trend. Athletic footwear sales in July were down in the high single-digits, then declined in the high teens in August (one of the market’s most important months of the year), and in September grew in the mid-teens. September should be viewed as the outlier here; likely due to the delayed/virtual back-to-school season, some business shifted out of August and into September. Looking at weekly dollar sales compared to the same weeks last year, September grew each week compared to the same period last year; however, August still generated higher weekly sales volumes than September, further supporting this shift. 

 

For the quarter, athletic footwear sales declined in the mid-singles. Women’s saw a slight increase, while men’s had a low single-digit decline and kids’ sales were down in the low teens.

 

In terms of channel performance, sales at mid-tier department stores dropped in the high teens and shoe chains in the high singles. Athletic specialty/sporting goods had a slight decline. Premium department stores had a mid-single-digit increase.

Looking at major athletic footwear brands, Nike brand posted a low single-digit increase for the quarter. Jordan declined slightly, giving back some of the gains achieved in Q2. Converse sales were down more than 30%. Adidas sales dropped in the high teens. Reebok sales were essentially flat for the quarter. Skechers footwear was down in the mid-teens. New Balance and ASICS declined in the high singles. Vans dropped by more than 25% and Under Armour dropped in the mid-teens.

Brooks sales grew by more than a third, Puma increased by over 20%, Hoka One One improved by more than two-thirds, and On Running more than doubled.

The big category winners were hiking/trekking and cold weather boots, both of which had substantial sales increases. This bodes well for the fourth quarter in these categories.

Sport lifestyle shoes declined in the low single-digits on the Jordan weakness. Running declined in the low single-digits, which is its best quarterly performance in some time. Skate shoes were down -25%. Basketball dropped in the high teens and now represents only about 3% of all athletic shoes sold.

The top selling athletic shoes for Q3 (in dollar rank order) are as follows: Nike Air Force 1 Low, Nike Air Max 270, Nike Revolution 5, Nike Air Max 97, Nike Air Max 90, Nike Air Vapormax Plus, Jordan XII Retro, Adidas NMD R1, Nike Air Max Excee, and Vans Ward.

In terms of the activewear highlights, this market saw a low single-digit increase in Q3.

Women’s activewear sales improved in the mid-singles, men’s grew in the low sinlges, and kids declined in the mid-singles.

Activewear sold through department stores dropped by about 10%, while the athletic specialty/sporting goods channel grew in the high singles.

In terms of brands, the aggregate of all retailers’ private brands is the largest “brand” in activewear and sales were up sharply – by more than +20%.

Nike and Under Armour activewear grew in the mid-singles during these three months, while Adidas declined in the low singles. Puma grew more than 20%. Hanes sales were up more than 20% while Fruit of the Loom and Champion both declined.

Outerwear tops and knit shirts declined in the low teens for the quarter. Socks were down in the mid-singles. Looking at growth areas, total pants were up in the mid-singles while sweatshirts grew in the mid-teens. Underwear bottoms improved by about 20% and bras grew in the low teens.

I expect both the athletic footwear and activewear markets to see soft declines in Q4, though there will be some bright spots as consumers buy product to meet their current needs. You can read more on my Q4 and holiday season expectations here.

 

Source: The NPD Group/ U.S. Retail Tracking Service, July-September 2020 vs. 2019

 

About NPD: NPD is a US-based analytical company which offers insights into 20 industries, including apparel, footwear and retail. It describes its services as follows: As consumer tastes change and the retail landscape evolves, new business opportunities and threats abound. We offer data, industry expertise, and prescriptive analytics to help our clients grow their businesses in a changing world. More than 2,000 companies worldwide rely on us to help them measure, predict, and improve performance across all channels.  They trust us to benchmark performance, guide strategic decision making, and find the best actions to take regarding pricing, product management, new product innovation, assortment, and customer segmentation. - https://www.npd.com/