4 Steady Shoes & Retail Apparel Stocks in a Troubled Industry

Industry Overview - The Zacks Shoes and Retail Apparel industry includes companies that design, source, and market clothing, footwear, and accessories for various demographics [2] - The industry is currently facing challenges such as elevated costs, reduced discretionary spending, and increased marketing investments, which are impacting profits [12] Consumer Demand Trends - There is a strong consumer demand for activewear and athleisure products, which is expected to continue into 2024 [15] - Companies are focusing on product innovations, active promotions, store expansion, and enhancing e-commerce capabilities to capture market share [15] Cost Headwinds - Companies are experiencing elevated costs due to commodity cost inflation, supply-chain constraints, and increased logistic costs, which are expected to hurt margins in the near term [3] - Rising SG&A costs due to marketing expenses and investments in digital operations are also a concern for industry players [3] E-Commerce Investments - E-commerce is crucial for growth in the athleisure market, with companies investing in digital channels to build customer bases [4] - Efforts to enhance delivery systems and improve in-store experiences are expected to drive traffic and transactions [4] Stock Market Performance - Stocks in the industry have collectively declined by 28%, while the Zacks Consumer Discretionary sector and the S&P 500 have risen by 2.7% and 23.7%, respectively [7] - The industry is currently trading at a forward 12-month P/E of 18.28X, compared to the S&P 500's 21.5X and the sector's 16.6X [8] Company Highlights - Caleres: The company is benefiting from positive consumer demand trends and strong performances from its brands, with a focus on omnichannel growth [11][22] - Skechers: The company is investing in e-commerce and distribution, with expected growth in sales and earnings of 10.6% and 16.9%, respectively, for 2024 [21] - Adidas: The company is poised to gain from strong demand and improved margins, with a projected sales growth of 5.1% for 2024 [23][33] - Wolverine: The company is focusing on improving efficiency and expanding its DTC business, which is expected to contribute positively to its performance [29]