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This week's sport’s apparel sales confirm two trends that we are currently observing across the athletic apparel industry: 1) inventories are tight, and 2) the consumer "trade down effect" has largely bypassed the industry.  These conclusions are supported by the divergence in performance between traditional Sporting Goods retailers (i.e. branded/performance), the Family channel, and the Discount/Mass channel.  Since the November lows that resulted from the sales "pull-forward" during October (yes, it was weather), sales of athletic apparel in the Sporting Goods channel have been particularly strong. Sales of similar, value-priced athletic apparel have lagged however in the Discount/Mass channel.

 Post-Holiday State of the Industry: Sports Apparel - Dollar Sales Channel

Sales in the Sporting Goods channel have been up an average of 9% y/y each week since the beginning of December, with sales in the Family channel flat-to-slightly up over the same period. In contrast, weekly results in the Discount/Mass channel have been down an average of 14% y/y since the start of December.  Furthermore, average price points in Discount/Mass have declined an average of 9% over that same period.  Contrast that with improving ASP’s in both the Sporting Goods (up an average of 2% y/y) and Family channel (up an average of 6% y/y) since the beginning of December.  It is clear that branded, performance product is key to the diverging results. 

 Post-Holiday State of the Industry: Sports Apparel - ASP Channel

The chart below illustrates how sales in the Discount/Mass channel have largely been under pressure for some time now.  Interestingly, the recent weakness comes at time when comparisons are easing and will remain so throughout much of 2010.  Further sales declines suggest market share loss to the other, higher priced channels and/or the consumers’ lukewarm appetite for value-priced athletic apparel.  Oddly, this all comes at time when we’ve seen other value-driven apparel retailers like Old Navy, Uniqlo, and Aeropostale outperform dramatically.  After some initial worry a couple of years ago with launch of Wal-Mart’s Starter and Target’s C9 brands, it appears that these opening price point offerings have yet to make a measurable impact on the branded players .  Clearly, the innovation, branding, and authenticity in the performance apparel space is helping to drive demand and differentiate the channels. Tight inventories are also a key driver behind the ASP increases.

 Post-Holiday State of the Industry: Sports Apparel - Discount Mass

We know that one week's worth of data hardly creates a trend, but there are always a few notable callouts:

  • UA was the only company in the sample to see a sequential pickup in dollar sales, improving by 100bps vs. last week to +9% y/y
  • At -3% y/y, this week marks the 11th out of the previous 12 weeks COLM sports apparel sales have declined on a y/y basis
  • Despite falling by 301bps sequentially, NKE market share still came in at +217bps y/y; Adidas was a not-too-distant second at +145bps y/y; NKE has been gaining 3-5 points of market share each week since mid-November, while Adidas has been gaining 1-4 points of market share during the same period

Post-Holiday State of the Industry: Sports Apparel - Sports Apparel Trends

Post-Holiday State of the Industry: Sports Apparel - Sports Apparel Industry by Company

Post-Holiday State of the Industry: Sports Apparel - Sports Apparel Industry by Category