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Clean inventories and higher price points more than offsetting flat unit sales for back-to-school. But mix shift will be the topic long after school begins. Still positive on FL and negative on SKX.
  • There’s no question that the athletic footwear industry is starting back-to-school in a better place this year versus last. As I noted on multiple occasions over the past few weeks, inventories are very clean, discounting is down, and margins are up for retailers across the board.
  • As a kicker we’re seeing a shift in mix towards higher-price point product, which is the part of this call that I think will sustain itself for at least the next 12 months.
  • Check out Exhibit #2, which shows the average price point by brand for back-to-school periods vs. non-bts for the past 2 years. Under Armour is the clear standout due to its trainer launch. But Puma, Adidas, Nike and Converse are all looking solid. Reebok can’t quite say the same. That’s because of its high reliance on classics, which are incrementally discounted in the market right now to clear out for fall.
BTS Starting Off Just Fine
This Will Be Driven More By Mix Shift Than YY Discounting Levels Over Next 12 Months