The footwear industry suffered a decline in sales and profits last year due to the COVID-19 pandemic. However, efforts to strengthen digital platforms, the launch of smart connected fabric concepts, innovations in custom materials, rising consumer spending, and pent-up demand for multifunctional convertible shoes have recently driven the market growth. of the shoe. The industry is expected to experience a significant increase in e-commerce and physical store sales. The global footwear market is expected to reach $ 281.2 billion by 2026, register a 3% CAGR.
Although the leading athletic footwear company NIKE, Inc. (NKE) is prepare for the metaverse, its business has recently been affected by global supply chain issues. In its latest earnings report, the company lowered its outlook for fiscal year 2022 to account for longer transit times, labor shortages and prolonged production stoppages in Vietnam. In addition, NKE expects its annual sales to increase by an average figure, compared to earlier prospects of weak double-digit growth. In addition, analysts expect NKE’s EPS to decline 19.2% in the current quarter and 17.8% in the next quarter.
Therefore, we believe that the fundamentally healthy footwear stocks Foot Locker, Inc. (Florida), Shoe Carnival, Inc. (SCVL) and Caleres, Inc. (CAL) could instead be ideal bets to capitalize on the industry’s strong growth prospects.
Foot Locker, Inc. (Florida)
FL is a leading retailer of athletic footwear and apparel. The York-based company sells sports accessories, equipment and footwear under a variety of brands including Foot Locker, Kids Foot Locker, Champs Sports and Sidestep. FL operated 2,998 retail stores and 127 Foot Locker franchise stores in 27 countries as of January 30, 2021. The company is known for celebrating sneaker and youth culture around the world.
This month, FL acquired atmos for $ 360 million. It is a high-end, digital-led global retailer headquartered in Japan. Through this acquisition, the companies expect to create significant long-term value for shareholders, consumers, supplier partners and employees. In addition, FL expects atmos to generate low double-digit sales growth each year and double-digit EBITDA margins through mid-teens over the next five years and increases EPS in its 2021 fiscal year.
FL sales for the second quarter, ended July 31, 2021, increased 9.5% year-on-year to $ 2.28 billion. The company’s operating income increased 282.6% from its value a year ago to $ 264 million. Its net profit increased 855.6% from the previous year quarter to $ 430 million. In addition, the company’s EPS increased 851.2% year-on-year to $ 4.09.
FLO’s revenue is expected to grow 17.4% year-on-year to $ 8.86 billion in its 2022 fiscal year. The company has exceeded consensus EPS in each of the past four quarters. Its EPS is expected to grow 152% in the current year. The stock has jumped 44.1% in the past year.
FL’s strong fundamentals are reflected in its POWR odds. The stock has an overall rating of B, which is equivalent to Buy in our proprietary rating system. POWR ratings evaluate stocks based on 118 distinct factors, each with its own weight.
Additionally, the stock has an A rating for value and momentum. We also rated FL for Stability, Feeling, Quality, and Growth. Click here to access all FL reviews. FL is ranked # 8 out of 38 stocks in the B-rated Athletics and recreation industry.
Shoe Carnival, Inc. (SCVL)
SCVL is a Based in Evansville, Indiana shoe retailer with stores in 35 states and Puerto Rico. The company also markets and sells its products through its e-commerce websites. SCVL offers a wide range of shoe collections for men, women and children, as well as handbags, lunch boxes, backpacks, sports products and other accessories. The Company operates its business through its subsidiaries, SCHC, Inc. and Shoe Carnival Ventures, LLC, and SCLC, Inc., subsidiaries of SCHC, Inc.
During the third quarter, ended October 30, 2021, SCVL’s net sales increased 29.8% year-on-year to $ 356.34 million. The company’s gross profit increased 64.1% from its value a year ago to reach $ 144.06 million. His operating result increased 209.6% from the previous year quarter to $ 62.42 million. In addition, the company’s net profit increased 219.1% year-on-year to $ 46.84 million.
Analysts expect SCVL’s revenue to grow 25.8% year-on-year to $ 1.23 billion in its fiscal year 2022. The Company Has an Impressive History of Surprising Profits; it has beaten consensus EPS estimates in each of the past four quarters. Its EPS is expected to grow by 703.6% in the current year. The stock has climbed 147.5% in the past year.
SCVL’s POWR ratings reflect this promising outlook. The stock has an overall rating of B, which is equivalent to a purchase in our proprietary rating system. Additionally, the stock has an A rating for Momentum and a B rating for Value and Quality.
In addition to the POWR ratings that I just outlined, one can see SCVL’s ratings for Stability, Sentiment and Growth here. SCVL is ranked n ° 14 out of 63 stocks in the A ranking Fashion & Luxury industry.
Caleres, Inc. (CAL)
CAL is a global footwear company operating through the Famous Footwear and Brand Portfolio segments. The Saint Louis, Miss., The company offers licensed, branded and private label athletic, casual and dress shoes for women, men and children. Its brands are sold worldwide, including more than 1,200 retail outlets, department and specialty stores, branded e-commerce sites and many third-party retail sites.
In September, CAL appointed Suzy Cirulis as Vice President, Customer Making. The company believes that Cirulis’ experience in CRM, retail and digital marketing should help it develop new ways to drive customer value, leveraging knowledge and data to make decisions strategic. This should help the company build deeper connections with current customers and build brand connections with new customers.
In its fiscal third quarter, ended October 30, 2021, CAL’s net sales increased 21.1% year-on-year to $ 784.16 million. The company’s gross profit rose 30.5% from its value a year ago to $ 335.35 million. Its operating profit increased 305.2% from the previous year quarter to $ 81.32 million. In addition, the company’s net profit increased 299.9% year-on-year to $ 59.69 million.
CAL’s revenue is expected to grow 28.5% year-on-year to $ 2.72 billion in its 2022 fiscal year. The company has exceeded consensus EPS in each of the past four quarters. Its EPS is expected to grow 342.9% in the current year. The stock has gained 87.7% in the past nine months and 136.5% in the past year.
It’s no surprise that CAL has an overall A rating, which equates to a strong buy in our POWR rating system. Additionally, the stock has an A rating for momentum and growth.
Click here to view additional POWR ratings for CAL (Sentiment, Stability, Quality and Value). CAL is ranked # 8 in the fashion and luxury industry.
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NKE shares fell $ 0.24 (-0.14%) in trading before market on Friday. Year-to-date, NKE has gained 21.03%, compared to a 26.54% increase in the benchmark S&P 500 over the same period.
Priyanka is an avid investment analyst and financial journalist. After earning a master’s degree in economics, her interest in financial markets motivated her to embark on her career in investment research. Following…