Footwear Stocks' Q4 Earnings Review: Top Performers and Strugglers
The fourth quarter of 2023 marked a mixed bag for the footwear industry, with some companies exceeding expectations while others fell short. In this article, we'll take a closer look at the top performers and strugglers among the sector's leading stocks.
A Shifting Landscape in Footwear Sales
Before the advent of the internet, styles changed gradually, but consumers mainly bought shoes by visiting local brick-and-mortar stores. However, today's fast-paced world has accelerated style changes, with fads spreading rapidly through social media and the internet. Consumers are also shifting their buying habits, favoring omnichannel and e-commerce experiences.
Some footwear companies have made concerted efforts to adapt to this changing landscape, while others may fall behind if they fail to keep pace. This article will examine the Q4 earnings reports of seven leading footwear stocks, highlighting both successes and struggles.
Q4 Earnings Review: A Mixed Bag
The 7 footwear stocks we track reported a mixed Q4, with revenues beating analysts' consensus estimates by 2.3% overall, but next quarter's revenue guidance lagging behind at 0.5%. Amidst this news, share prices of the companies have had a rough stretch, averaging a decline of 24% since the latest earnings results.
Steven Madden (NASDAQ:SHOO): A Fashion Brand in Flux
As seen in the infamous Wolf of Wall Street movie, Steven Madden is a fashion brand famous for its trendy and innovative footwear. The company appeals to a young and style-conscious audience. In Q4, Steven Madden reported revenues of $582.3 million, up 12% year on year, exceeding analysts' expectations by 5.7%. Despite the top-line beat, it was still a slower quarter for the company with full-year EPS guidance missing analysts' expectations significantly.
Chairman and Chief Executive Officer Edward Rosenfeld commented, "We are pleased to have delivered earnings results at the high end of our guidance range for the fourth quarter and full year 2024. For the year, revenue grew 15% and Adjusted diluted EPS increased 9% compared to 2023. Our strong performance in 2024 was driven by our team's disciplined execution of our key strategic initiatives, with robust gains in international markets, non-footwear categories, and direct-to-consumer channels, as well as a return to revenue growth in our U.S. wholesale footwear business."
Nike (NYSE:NKE): A Global Leader in Athletic Footwear
Originally selling Japanese Onitsuka Tiger sneakers as Blue Ribbon Sports, Nike is a global titan in athletic footwear, apparel, equipment, and accessories. In Q4, Nike reported revenues of $12.35 billion, down 7.7% year on year but outperforming analysts' expectations by 1.8%. The business had an exceptional quarter with an impressive beat of analysts' adjusted operating income estimates and a solid beat of analysts' EPS estimates.
Genesco (NYSE:GCO): A Struggling Footwear Retailer
Spanning a broad range of styles, brands, and prices, Genesco sells footwear, apparel, and accessories through multiple brands and banners. In Q4, Genesco reported revenues of $745.9 million, flat year on year, falling short of analysts' expectations by 5%. It was a softer quarter as it posted adjusted operating income in line with analysts' estimates.
Genesco delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 36.1% since the results and currently trades at $20.75.
Skechers (NYSE:SKX): A Comfortable but Struggling Brand
Synonymous with "dad shoe," Skechers is a footwear company renowned for its comfortable, stylish, and affordable shoes for all ages. In Q4, Skechers reported revenues of $2.21 billion, up 12.8% year on year. This print met analysts' expectations. More broadly, it was a softer quarter as it recorded a significant miss of analysts' EPS estimates.
The stock is down 25.3% since reporting and currently trades at $56.51.
Wolverine Worldwide (NYSE:WWW): A Global Footwear Company
Founded in 1883, Wolverine Worldwide is a global footwear company with a diverse portfolio of brands including Merrell, Hush Puppies, and Saucony. In Q4, Wolverine Worldwide reported revenues of $494.7 million, up 3% year on year, topping analysts' expectations by 5.9%. However, it was a slower quarter as it logged full-year EPS guidance missing analysts' expectations.
Wolverine Worldwide pulled off the biggest analyst estimates beat but had the weakest full-year guidance update among its peers. The stock is down 30% since reporting and currently trades at $13.10.
Conclusion
The footwear industry's Q4 earnings results present a mixed picture, with some companies exceeding expectations while others fall short. Steven Madden, Nike, Skechers, and Wolverine Worldwide reported varying levels of success in the quarter, but Genesco struggled to meet analysts' estimates. As the industry continues to navigate the challenges posed by changing consumer habits and increasing competition, investors will be closely watching these stocks to see which ones emerge as winners.
Investment Opportunities
For those looking to invest in high-quality companies with strong fundamentals, our Top 5 Quality Compounder Stocks offer a promising starting point. These companies are poised for growth regardless of the political or macroeconomic climate.
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