As the Q2 earnings season wraps, let’s dig into this quarter’s best and worst performers in the footwear industry, including Crocs (NASDAQ:CROX) and its peers.
Before the advent of the internet, styles changed, but consumers mainly bought shoes by visiting local brick-and-mortar shoe, department, and specialty stores. Today, not only do styles change more frequently as fads travel through social media and the internet but consumers are also shifting the way they buy their goods, favoring omnichannel and e-commerce experiences. Some footwear companies have made concerted efforts to adapt while those who are slower to move may fall behind.
The 8 footwear stocks we track reported a satisfactory Q2. As a group, revenues were in line with analysts’ consensus estimates while next quarter’s revenue guidance was 4.4% above.
Inflation progressed towards the Fed's 2% goal recently, leading the Fed to reduce its policy rate by 50bps (half a percent or 0.5%) in September 2024. This is the first cut in four years. While CPI (inflation) readings have been supportive lately, employment measures have bordered on worrisome. The markets will be debating whether this rate cut's timing (and more potential ones in 2024 and 2025) is ideal for supporting the economy or a bit too late for a macro that has already cooled too much.
In light of this news, footwear stocks have held steady with share prices up 2.5% on average since the latest earnings results.
Crocs (NASDAQ:CROX)
Founded in 2002, Crocs (NASDAQ:CROX) sells casual footwear and is known for its iconic clog shoe.Crocs reported revenues of $1.11 billion, up 3.6% year on year. This print was in line with analysts’ expectations, but overall, it was a mixed quarter for the company with a solid beat of analysts’ constant currency revenue estimates.
"We reported record second quarter results on both the top and bottom line which exceeded our guidance on all Enterprise metrics," said Andrew Rees, Chief Executive Officer.
Interestingly, the stock is up 1.8% since reporting and currently trades at $136.93.
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Best Q2: Genesco (NYSE:GCO)
Spanning a broad range of styles, brands, and prices, Genesco (NYSE:GCO) sells footwear, apparel, and accessories through multiple brands and banners.Genesco reported revenues of $525.2 million, flat year on year, outperforming analysts’ expectations by 2.5%. The business had a very strong quarter with an impressive beat of analysts’ operating margin and earnings estimates.
Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 7.1% since reporting. It currently trades at $27.36.
Weakest Q2: Caleres (NYSE:CAL)
The owner of Dr. Scholl's, Caleres (NYSE:CAL) is a footwear company offering a range of styles.Caleres reported revenues of $683.3 million, down 1.8% year on year, falling short of analysts’ expectations by 5.6%. It was a disappointing quarter as it posted a miss of analysts’ earnings estimates.
Caleres delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 14.2% since the results and currently trades at $31.95.
Deckers (NYSE:NYSE:DECK)
Established in 1973, Deckers (NYSE:DECK) is a footwear and apparel conglomerate with a portfolio of lifestyle and performance brands.Deckers reported revenues of $825.3 million, up 22.1% year on year. This number beat analysts’ expectations by 2.4%. It was a very strong quarter as it also recorded an impressive beat of analysts’ earnings and operating margin estimates.
Deckers delivered the fastest revenue growth but had the weakest full-year guidance update among its peers. The stock is up 12.4% since reporting and currently trades at $158.11.
Skechers (NYSE:SKX)
Synonymous with "dad shoe", Skechers (NYSE:SKX) is a footwear company renowned for its comfortable, stylish, and affordable shoes for all ages.Skechers reported revenues of $2.16 billion, up 7.2% year on year. This print lagged analysts' expectations by 3.5%. Taking a step back, it was a mixed quarter as it also produced revenue guidance for next quarter exceeding analysts’ expectations but a miss of analysts’ constant currency revenue estimates.
Skechers delivered the highest full-year guidance raise among its peers. The stock is up 5.7% since reporting and currently trades at $67.35.
This content was originally published on Stock Story
