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Trends remain positive in the Athletic Footwear space. Sequentially better price points in all channels driving growth. UA share hits the 1% mark – a psychologically important mark – as opposed to a financial one. ADIbok breaches 10% share. Hi-end shoes are still where it’s at.

Here is some additional color on FW trends:

  • All three channels’ sales growth improved over August trends with positive growth in ASPs across the board. The department & National Chain store channel’s ASP growth accelerated above the pricing growth in the shoe chain channel which last occurred in January (which was the last time the dept. store channel posted positive growth in pricing).
  • The gap between market share by channel continued to tighten further in September on both an absolute and a trailing 3 month basis. The spread between Athletic Specialty and department store tightened from ~3 full points to ~2.3%.  This is potentially meaningful.
  • Sales in ASPs greater than $130 remain positive in every channel except shoe chain where growth is driven by footwear priced at $70 or less (which accounts for 91% of the shoe chain channel’s sales). At an industry level, despite the fact that sales in ASPs greater than $130 only account for 9% of sales, had this price band run flat in September, the top line run rate would have been down slightly; the 17% growth in the more expensive footwear was a positive contributor on the month and continues to fuel the Athletic Specialty/SG & Department store channels as well.
  • Under Armour’s newest running shoes layered on 22% of growth in September and were a key drivers in the 11 bps share gain. While the new UA Reign, Stealth & Split are certainly gaining momentum in the early stages of the product launch, UA is going to need A LOT more of this to prove that it’s on its way to a $500mm business, but positive progress nonetheless that we’ll be watching closely. As sales volumes increase in FW, so will the category’s margin profile, but for now a product with margins close to 30% growing as a % of sales will add further pressure to aggregate margins. Moreover, with 74% of inventory growth at the end of Q2, UA will be pressed to clear inventories whether or not it comes at the expense of full priced sell through.
  •  After posting several months of meaningful sales growth, Reebok’s sales decelerated dramatically on a yy decline in pricing; Adidas growth accelerated on the month. We’ll keep our eyes out for the Reebok trends next month. But netting them both out, we’re still looking at better than 10% share.

FW: Growth in Tact - monthly FW chart 1


FW: Growth in Tact - monthly FW chart 2


FW: Growth in Tact - monthly fw chart 3


FW: Growth in Tact - monthly fw chart 4


FW: Growth in Tact - monthly fw chart 5


FW: Growth in Tact - monthly fw chart 6


FW: Growth in Tact - monthly fw chart 7


FW: Growth in Tact - UA new running MONTHLY