Yahoo Finance As Footwear Earnings Season Unfolds, Here Are The Biggest Winners and Losers So Far
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Earnings season is in full swing.
Under Armour, Boot Barn, On Holding, Wolverine Worldwide, Crocs and Allbirds all recently reported earnings results. In some cases, companies posted strong sales, despite ongoing headwinds from inflation and a weaker wholesale environment in North America. Other companies saw less positive results as their plans to turn around their businesses take longer to show results.
Here, we break down some of the companies that did well and the ones that had less positive results in their most recent quarters.
The Winners
On Holding: The trendy Swiss running shoe brand continued its strong momentum in Q1 and surpassed 500 million Swiss francs in sales for the first time. The Zurich-based brand said it achieved sales of 508.2 million Swiss francs, a 20.9 percent increase from last year, and a net income increased of 91.4 million Swiss francs, up 106 percent. The gains were led by strong demand in the company’s direct-to-consumer channel where sales rose 39 percent in the quarter, or 48.7 percent on a constant currency basis. DTC sales now make up 37.5 percent of On’s total volume. Martin Hoffmann, co-chief executive officer and chief financial officer, told FN the DTC gains came primarily from the digital channel, but sales at its 50 stores globally also contributed to the gains. On launched its first commercial app globally in the quarter as well.
Boot Barn: The boot retailer wrapped up fiscal 2024 with top-and bottom-line beat ahead of its prior guidance. Jim Conroy, president and chief executive officer of Boot Barn, was upbeat about the performance in a statement, though was adamant that the western boot driven by Beyoncé’s “Cowboy Carter” album drop wasn’t bringing much business to Boot Barn. However, Williams Trading analyst Sam Poser said the Beyonce album had a direct correlation to the improvement of Boot Barn’s trends.
Wolverine Worldwide: Even though overall sales were down for Wolverine Worldwide in the first quarter of 2024, the company’s turnaround efforts seem to be taking hold as president and chief executive officer Chris Hufnagel reported better-than-expected revenue in the period. The company reaffirmed its earnings guidance but lowered its revenue outlook for the full year to reflect recent business model changes for its Merrell and Saucony Kids business.
The Losers
Under Armour: In tandem with its fourth quarter earnings announcement this week, Under Armour announced a business restructuring plan, which includes layoffs, as its chief executive officer Kevin Plank looks to rebuild heat at the struggling brand. The 18-month reinvention is meant to help Under Armour achieve a premium brand position, especially in North America. It kicks off during an already turbulent time for the company, which in March saw the sudden departure of its CEO Stephanie Linnartz after just a year on the job. Under Armour also forecasted sales in North America falling by 17 percent in fiscal year 2025.
Crocs: Although, Crocs Inc. reported better-than-expected results for the first quarter, its Hey Dude brand continued to lag in Q1, with revenues down 17.2 percent to $195 million. The slowdown was present in both wholesale, which decreased 19.7 percent, and direct-to-consumer, which decreased 11 percent. Given the slowdown, Crocs Inc. now expects Hey Dude revenues to decline between 10 and 8 percent for the full year, down from its prior outlook of between flat and slightly up for the year. Still, strong performance from the Crocs brand prompted the company to raise its full-year adjusted diluted earnings per share outlook to between $12.25 and $12.73, up from its prior guidance of between $12.05 and $12.50. Crocs Inc. reaffirmed its revenue guidance of between 3 and 5 percent for the year. Crocs brand revenues are now expected to grow between 7 and 9 percent.
Allbirds: The brand said it progressed on its transformation plan during its first quarter under the leadership of its new chief executive officer, Joe Vernachio, but the company still reported depressed results for Q1. Revenues dropped 27.6 percent to $39.3 million, in line with its guidance, and net loss was $20.9 million, or 18 cents per basic and diluted share, which beat its guidance range. Allbirds said it plans to close 10 to 15 U.S. locations in 2024. Since its initial public offering in 2021, Allbirds’ stock has plunged more than 90 percent. In April, Nasdaq warned the shoe brand that had six months to raise its stock price to more than $1 dollar for 10 consecutive business days.
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