The best performing shoe stock over the past six months may come as a surprise for many investors. While basketball shoes are seeing some weakness, it has become clear that retro is the style right now.
Puma’s Pounce: Hottest Shoe Stock
Puma AG Rudolf Dassler Sport has been the best athletic shoe stock over the second half of 2016, up 17 percent in the past six months. By comparison, Under Armour Inc UA 0.36% is down 20 percent, Nike Inc NKE 0.35% has declined 8 percent, adidas AG (ADR) ADDYY 0.82% has grown 14 percent and Skechers USA Inc SKX 2.55% has fallen 24 percent.
As explained by Richard Johnson, chairman and CEO of Foot Locker, Inc. FL 0.35% on the company’s third-quarter earnings call last week, “Another strongly uptrending brand in the quarter was Puma. Puma creepers, platforms and suedes delivered excellent performance across almost all of our banners, especially in our women’s businesses.”
Return To Retro And Celeb Endorsements
Athletic shoe companies taking a fashionable approach has been paying off; Adidas has staged a comeback as a result, which could also be a reason why Under Armour has been struggling lately, as it is seen as more of a performance-wear brand.
It’s no surprise that Puma’s women’s business has seen an uptick after key endorsements with female fashion influencers Rihanna and Kylie Jenner. Shoe companies opting for celebrity and artist endorsements as opposed to athletic endorsements has clearly paid off for adidas and Puma.
Foot Locker saw strong gains in footwear by Puma, adidas and Nike in the quarter. Consumers are opting for more retro styles, as evidenced by Adidas Stan Smith, Puma Suedes and Clydes and Vans classics being the top casual styles at Foot Locker in Q3.
“Right now retro is all the rage” said shoe industry expert Matthew Powell.
“Classics continued to be a force to be reckoned with in athletic footwear, with sales for this category up about a third. Nearly every major brand posted an increase in this category. It’s hard not to be successful here. The retro trend will continue to be hot through the holidays, at the expense of performance footwear, and be the sales leader through the end of the year,” he added.