SGB Executive

Stifel lowered its ratings on Under Armour due to sales and margin concerns and Columbia Sportswear on weather risks. Both stocks were reduced to “Hold” from “Buy.” Stifel reiterated its “Buy” rating on Nike but lowered its price target.

Winnebago Industries’ earnings surged 73.5 percent in the first quarter ended November 27 on a 46 percent sales gain, easily outperforming Wall Street’s expectations. Mike Happe, president and CEO, said, “The way in which consumers have increasingly embraced an excitement for the outdoor lifestyle remained a powerful tailwind, driving demand for Winnebago Industries’ premium products, whether on land or water.”

In an interview with SGB Executive, Steve Lawrence, EVP and chief merchandising officer, Academy Sports + Outdoors, discussed the chain’s record third-quarter performance that marked its sixth straight quarter of double-digit gains, as well as the chain’s upbeat outlook.

Most retailers in the active lifestyle space again broadly delivered third-quarter results that topped Wall Street’s targets and lifted their 2021 guidance as sales momentum remained resilient. However, supply chain concerns, marked by port congestion and factory shutdowns in Vietnam, were widely discussed on recent quarterly calls. Insights from Dick’s Sporting Goods, Hibbett, Academy Sports + Outdoors, Big 5, Kohl’s, Foot Locker, Lululemon, and others follow.

Nike Inc.’s acquisition of RTFKT, a virtual sneaker design company and a studio for non-fungible tokens (NFTs), is yet another sign that the sportswear giant is a big believer in crypto-technology and sees major revenue opportunities in both the metaverse and digital footwear.

American Outdoor Brands reported sales fell 10.5 percent in the fiscal second quarter ended October 31, to $70.8 million. Officials blamed it on the timing of orders from traditional brick-and-mortar channels and underlying demand remains healthy. Brian Daniel Murphy, president, CEO, said certain retail customers accelerated their inventory purchases into the first fiscal quarter to mitigate their own supply chain risk.

Johnson Outdoors Inc. reported sales inched up one percent in the fiscal fourth quarter ended October 1 but ended the fiscal year with a 26 percent gain to reach record annual sales levels. Softer sales in the fourth quarter in Fishing, its largest segment, offset gains at its other three segments, Camping, Watercraft Recreation and Diving.     

Academy Sports + Outdoors, Inc reported its ninth consecutive quarter of positive comparable sales, including double-digit increases for the last six quarters. Third-quarter results easily topped expectations and Academy Sports lifted its outlook for the third time this year. Ken Hicks, CEO, told analysts “We believe there is much more to come as we continue to improve our merchandise processes, develop new capabilities and open new stores to drive growth and profits.”

Lululemon raised its full-year guidance as strong momentum in its core business in North America is expected to offset dimmed near-term expectations for its Mirror connected fitness platform as well as supply chain headwinds. Calvin McDonald, CEO, told analysts, “Our strength continues to be broad-based and balanced across every facet of our business, including channel, category, activity, gender, and geography.”

Sportsman’s Warehouse Holdings Inc., in its first quarterly report since its merger with Bass Pro was scuttled, managed to generate modest growth in the third quarter ended October 30. The gains came despite grueling comparisons in the year-ago period due to the surge in interest in hunt and outdoor activities in the early stages of the pandemic.

Thor Industries’ earnings doubled in the first quarter ended October 31 and sales jumped 56.0 percent, again crushing Wall Street targets. Bob Martin, president and CEO said, “It seems the market focuses on the supply chain and labor challenges that our industry is facing right now more than it does our performance in the face of those challenges.”

In its first quarterly report since going public on October 28, Solo Brands reported sales vaulted 138.3 percent in the third quarter ended September 30 with strength across its four brands—Chubbies, Isle Paddle Boards, Oru Kayak, and Solo Stove. John Merris, CEO, said, “The key attributes of our platform are (1) our direct connection to our community of customers, (2) our innovative product development capabilities and (3) our scalable global infrastructure.”

Designer Brands Inc. said athleisure comps at the DSW chain in the third quarter surged 38 percent year-over-year and 30 percent compared to the third quarter of 2019. Officials remain bullish on DSW’s ability to continue to capture market share in the overall athletic footwear category despite Nike’s move to stop selling to the off-price chain.

Powered by a robust back-to-school (BTS) season and scant markdowns at its flagship Journeys chain, Genesco Inc. reported third-quarter earnings that came in well ahead of Wall Street’s targets and offered a bullish outlook for the year. Mimi Vaughn, Genesco’s CEO, told analysts, “The current fashion cycle, which I’ve been describing as shifting more into casual, plays into Journeys strength with a nicely diversified assortment.”

Aided by new digital frontiers, advances in sustainability and hopefully a return to more socializing, McKinsey’s The State of Fashion 2022 conducted in collaboration with the Business of Fashion (BoF) found the fashion industry positioned to rebound in 2022. Executives in its study predicted that supply chain pressures, the rise of domestic luxury spending amid muted international travel and the continuing evolution of digital channels would have the greatest impact on their businesses in 2022.