The best performing shoe stock over the past six months may come as a surprise for many investors. While basketball shoes are
seeing some weakness, it has become clear that retro is the style right now.
Puma's Pounce Hottest Shoes Stock
Puma AG Rudolf Dassler Sport has been the best athletic shoe stock over the second half of 2016, up 17 percent
in the past six months. By comparison, Under Armour Inc (NYSE: UA) is down 20 percent, Nike Inc (NYSE: NKE) has declined 8 percent, adidas AG (ADR) (OTC: ADDYY) has grown 14 percent and Skechers USA Inc (NYSE:
SKX) has fallen 24 percent.
As explained by Richard
Johnson, chairman and CEO of Foot Locker, Inc. (NYSE: FL) on the company’s third-quarter earnings call last week, “Another strongly
uptrending brand in the quarter was Puma. Puma creepers, platforms and suedes delivered excellent performance across almost all of
our banners, especially in our women's businesses.”
Return To Retro And Celeb Endorsements
Athletic shoe companies taking a fashionable approach has been paying off; Adidas has staged a comeback as a result, which could
also be a reason why Under Armour has been struggling as of late, as it is seen as more of a performance-wear brand.
It's no surprise that Puma’s women’s business has seen an uptick after key endorsement with female fashion influencers Rihanna
and Kylie Jenner. Shoe
companies opting for celebrity and artist endorsements as opposed to athletic endorsements has clearly paid off for adidas and
Puma.
Foot Locker saw strong gains in footwear by Puma, adidas and Nike in the quarter. Consumers are opting for more retro styles, as
evidenced by Adidas Stan Smith, Puma Suedes and Clydes and Vans classics being the top casual styles at Foot Locker in Q3.
“Right now retro is all the rage”
said shoe industry expert Matthew Powell.
“Classics continued to be a force to be reckoned with in athletic footwear, with sales for this category up about a third.
Nearly every major brand posted an increase in this category. It’s hard not to be successful here. The retro trend will continue to
be hot through the holidays, at the expense of performance footwear, and be the sales leader through the end of the year,” he
added.
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