For those that thought the performance business had seen its peak, it was a wake-up call in a week that saw the sporting goods markets largest full-line sporting goods retailers post solid results that appear to signal a beginning rather than an end to energy in the business. Couple that with an Under Armour IPO that saw the strongest first day gain on Wall Street in five years and big gains in marquee footwear sales in the U.S. Foot Locker Inc. business, Sports Executive Weekly would have to say that the cries from analysts this fall about the death of performance were greatly exaggerated — and probably extremely naïve.
The conference calls each of the retailers held last week with analysts featured a steady stream of questions about the health of athletic footwear and performance apparel. The answers came back almost unanimously that the performance business is just fine thank you very much and looks to be setting a new baseline for growth for next year.
Based on the feedback from the retailers and input from SportsOneSource analysts, the move to better goods is penetrating the consumers buying habits at a number of levels. Under Armour has clearly set the table for other performance apparel brands and a number of footwear brands are drafting off of the success of Nike and Asics, but the trend is clearly being felt in hardgoods as well, where the market sees Shock Doctor, Schutt, and others setting a new bar in protective gear.
To be fair, Wall Street may have gotten a bit spooked by weak results at Reebok, where the decline of the value classics business has perhaps been felt the most, and at Timberland, which has also seen its fortunes go the way of that fashion trend in urban America.
What was missed by analysts was the conversation that Nike is back again driving marquee footwear sales at Foot Locker, adidas and Puma both had exceptionally strong quarters in the U.S. market, and the decline in the Reebok business at Foot Locker was due almost entirely to a shift away from white-leather-foot-covering as the consumer opts for technical footwear or performance-influenced marquee footwear product.
