Q3 could see higher apparel and footwear inventory, better discounts on card?

Sep. 14, 2022 5:46 PM ETNKE, VFC, WWW, FL, DECK, CROX, COLM, UAA, ONONBy: Manshi Mamtora, CFA

A millennial woman is preparing the shipment of some clothes in her new online shop


Baird reports point out some crucial numbers, making a three-year comparison for revenues and inventory levels of active lifestyle footwear, apparel and fitness players.

Segment wise checking trends and inventories for footwear suppliers: August revenues showed strength, with weighted average composite one-year growth of 104.8%, keeping in mind last year's Vietnam disruption. Three-year growth was 19.9% (July +18.5%). M/M rise of 3.5% was seen in August vs. an average August M/M increase of +0.0% indicating continued strong increases in production.

August revenue of key Nike (NKE) suppliers were seen surging on a three-year basis.

A softer outlook for apparels with revenue increasing 24.8% on a weighted-average basis in August, following a rise of 11.3% in July. Three-year growth was 20.8% vs. 33.6% in July. Apparel index fell 4.9% M/M in August which represented a greater-than-usual decline.

Higher production volumes in August for apparel and footwear both could mean higher Q3-ending inventory levels and potentially bigger discounts over the near-term.

Broadly, U.S. CPI report showed a +1.1% M/M increase in combined apparel and footwear prices.

Stocks on radar: Columbia Sportswear Company (COLM); Crocs (CROX); Deckers Outdoor (DECK); Foot Locker (FL); Nike (NKE); On Holding (ONON); Under Armour (UAA); V.F. Corporation (VFC); Wolverine World Wide (WWW)

Recommended For You


To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.