Industry public companies hit the investor conference circuit last week in an environment that is decidedly different from the market one year ago. The two big conferences for the active sports lifestyle market were the ICR XChange Conference in Dana Point, CA and the Cowen & Co. Consumer Conference in New York City. Generally, presentations focused on managing the business towards profitability on flat to down sales while maximizing each dollar invested.
The first big difference seen this year is the number of companies that were out in front of their earnings releases with guidance that, for the most part, painted a much better picture for the fourth quarter and year-end results. This in contrast to a round of conference presentations last year that saw companies with any limited visibility on short term business trends back off as the consumer and market proved too volatile at the time to gauge future actions.
Much of the improved results for vendors in 2009 was due in large part to cost-cutting measures and an increase in owned-retail activities, particularly in the international market and the Internet. But there are concerns cited by some analysts that companies will not be able to save themselves to growth in 2010 and the owned-retail initiatives are simply hiding weaker or flat base wholesale businesses. Still, the opportunity for international business is seen as a plus in general as growth in markets outside the U.S., particularly in Asia and Europe, as many see recovery faster than in the U.S., due in large part to actions taken by other governments to boost their economies.
The reports by companies presenting at the two annual conferences pushed a number of company stocks up in double-digits for the week, namely Golfsmith (+16.0%), Brown Shoe Co. (+13.8%), Delta Apparel (+10.4%) and Crocs (+10.3%). With the exception of Golfsmith and Famous Footwear parent Brown Shoe Co., the market was not kind to the retail side of the business. Genesco (-13.5%) and Big 5 (-10.9%) were the big losers for the week, but Dick’s Sporting Goods (-8.4%), Zumiez (-8.0%), Hibbett Sports (-4.9%) and Pacific Sunwear (-3.6%) also fell into negative territory for the week. Genesco, Big 5 and Zumiez presented while the others did not.