So much for the old thinking that the sporting goods industry is recession-proof. Based on the performance of public company stocks in the active sports lifestyle industry tracked by Sports Executive Weekly, it does not appear that Wall Street is buying into the old adage this time around.
The industry as a whole roughly matched the decline of the Dow Industrial average for the first half of the year, as the SEW Industry Index fell 15.2% during the six-month period ended June 27, 2008. The SEW Industry Index (SII), which tracks 65 international public companies on a weekly basis, declined more sharply than the S&P 500 during the same period.
The BOSS Outdoor Industry Index fell even more sharply, declining 17.1% for the six-month period.
The indices on the right were first established in March 2000 to track the active sports lifestyle market against the S&P 500 and were first set at 1,498 at that time. Companies may be included in more than one index if the company crosses over more than one tracked segment. The Dept Store Index, which includes discount/mass, is not used in the SEW Industry Index.
Most of the individual companies making up the SII contributed to the sharp decline for the YTD period, with only 12 companies of the 65 total companies tracked managing a positive trend. Conversely, 15 companies saw their share price fall by more than a third for the six-month period, a list that included former Street darlings Crocs, Heelys, Under Armour and Lululemon Athletica.
The Finish Line was the biggest winner in the first half of the year after it settled out of court with Genesco Inc. and both again focused on their respective businesses. Shimano got a boost from a big dividend pay-out and Quiksilver got a late boost after signaling that it would divest itself of the Rossignol business it acquired in 2007. Hibbett and Wolverine also saw share price grow in double-digits.
Looking at the year-over-year trend, the SII was down over 25% versus a 15% decline in the S&P 500. Ouch…
