Our friend Matt Powell, Analyst at SportsONESource, gives us another inside look in his monthly footwear industry sales report. This time around, Matt briefly covers the prior month of July and then drills down into Q2 2010 sales specifics. Toning continues to provide industry growth, Running remains a strong current storyline, Jordan Brand business declined for a 4th straight month, and top selling shoes for the quarter were Nike Air Force 1, Skechers Shape-ups, Reebok Easy Tone, Nike FREE, and an Air Jordan 6 Retro. Continue reading for Matt Powell’s complete Footwear Industry Sales Report: Q2 2010.
The solid performance of Sport footwear has continued into July. Let’s do a quick recap of July and then dive into more detail for the 2nd quarter.
Sales for July slowed from the 10% gains we saw in May and June but were positive nonetheless, improving in the mid singes in dollars and low singles in units driving a low single digit increase in average selling price. July is typically one of the smallest months in volume. The smallest week of the year occurred during July.
The last week of July is the unofficial kick off to back to school. Sales for the last week only grew in the low singles. I’ve been following the back to school business for 35 years and it always seems to start off slowly. What matters in back to school is how it finishes, not how it starts.
Virtually all the growth in July came from Toning. Toning was 5.3% of sales for July, in line with its contribution year to date. While sales of Toning slowed from earlier dollars values, so did the sales of all athletic shoes. Toning remains on track to exceed $1 billion and will likely hit $1.5 billion for the year. The Skechers planned promotion appeared to be successful, as it doubled the units sold and liquidated older styles.
The other big headline for July was the Jordan business, which declined for the 4th straight month, down in the high singles. The styles offered this year simply could not offset the ones from last year. Anecdotally, we are hearing the styles for Q3 should be much more successful.
Overall the sales for Q2 remained on track, growing in the high single digits in dollars and the low singles in units, yield a mid single digit increase in average selling price.
By Channel, Family footwear again led the charge with sales improving in the mid teens. Mall and Full Line both grew in the mid singles.
Top sellers for the quarter were: Air Force 1 (2 styles) Shape- ups (4 styles) Easy Tones (2 styles) a Nike Free running style and a retro Jordan 6.
Men’s sales improved in the mid singles. Women’s sales grew in the high teens. Nike women’s sales again declined in the high singles and Nike lost 700 basis points in women’s market share. Kid’s sale declined in the low singles. Kids is suffering from the lack of toning and from having little lightweight running. If we look at the adult business without the positive effect of toning and lightweight running, the trends there are similar to the trend in kids.
Three quarters of the growth in Q2 came from Toning and the balance came from Lightweight Running. For the quarter, Skechers had 60% share of Toning and Reebok 34%. Avia had 3%.
Running remains a very important story, lead by Lightweight which grew more than 3 times. Overall running improved in the mid teens. All the major brands except Adidas (down high teens) and Under Armour (down low teens) had nice increases. Puma running grew by half on the fashion styles. The smaller brands (Saucony, Brooks, and Mizuno) all had strong increases.
Performance running 45% of sales grew about 25%, while fashion running only grew in the mid singles.
Basketball declined in the low singles as Jordan sales were off in the high singles. Brand Nike basketball grew in the high teens while Adidas declined in the low teens. And 1 improved by two thirds.
Lifestyle fashion athletic again declined in the high teens. Every major brand had significant declines.
Classics dropped about -10%. Only New Balance showed improvement. All others declined
Training improved in the high singles. Both Nike and New Balance had strong growth in basic white footcovering. Under Armour Training declined about a third.
Cleated improved in the mid singles. Nike and Under Armour grew in the low singes, while Adidas posted a mid teens gain, as the World Cup sparked some interest in soccer for them
The struggles in Skate continued with sales down more than -20%. This hit the family channel particularly hard, as they do the bulk of the Skate business. Of the major brands, only Vans had an increase in Skate.
Sandals grew in the low teens. Adidas and Jordan both had declines. Crocs were up 20%.
Brand Nike (33.4% share) lost 170 basis points in share, and sales only improved in the low singles, well off the industry trend. Good results in basketball and running barely offset the lack of a toning strategy and weak Skate and Lifestyle. Jordan (8.3%) lost 160 basis points in share as sales declined in the high singles. Converse declined in the low teens as Chuck Taylor has crested.
Skechers (6.8%) held #3 share, as sales nearly doubled. Reebok (4.3%) sales did double and share leapt 200 basis points. Adidas (5.4%) sales declined in the mid singles, as improved classics helped offset other declines.
Asics (4.0%) sales improved in the mid singles. Saucony, Brooks and Mizuno were all up sharply.
Crocs sales grew 29% while Under Armour declined about -25%.