3 interesting stocks from the footwear industry
The footwear industry has seen recent growth driven by trends such as athleisure and sustainability. In this article, we'll take a look at three prominent players in the sector and use AAII's A+ Stock Grades analyst ratings to see how they're doing in the current market.
Current State of the Footwear Market
According to a report from Grand View Research, the global footwear market, which was valued at $438.6 billion in 2023, will grow at a compound annual growth rate of 4.3% through 2030. This growth is fueled by the growing popularity of athleisure, which is a combination of athletic and casual footwear that meets the needs of different consumer groups. While younger generations prefer style and comfort, older consumers focus on comfort and durability.
Another important factor is the demand for sustainable products. Consumers are increasingly looking for footwear made from eco-friendly materials and using sustainable methods. Advances in footwear technology, such as smart features for monitoring health indicators, are also attracting tech-savvy buyers looking for multifunctional products.
Crocs $CROX-1.4%
Crocs, Inc.
CROXCrocs is known for its unique footwear that combines comfort with innovative design. The company is divided into two main segments - the Crocs brand and HeyDude. The Crocs brand uses Croslite material that is lightweight, soft and odor resistant, which contributes to its exceptional comfort. The HeyDude brand offers footwear with a unique silhouette that focuses on versatility and style.
Crocs has a Momentum B rating, indicating that its stock has shown strong growth over the past four quarters. With an A-quality rating and a 17.3% return on assets that puts it among the best in the industry, analysts say Crocs is an excellent choice for investors looking for a stable and growth-oriented stock. Moreover, with an average annual sales growth rate of 29.5% and a strong F-Score, Crocs shows that it is well positioned for future expansion.
Rocky Brands $RCKY+0.7%
Rocky Brands, Inc.
RCKYRocky Brands is a renowned footwear and apparel manufacturer with a broad portfolio of brands, including Rocky, Georgia Boot and Durango. Its footwear is known for its durability and comfort, and the company targets diverse markets through wholesale, retail and contract manufacturing. Rocky Brands ships to more than 10,000 retail stores in the U.S., Canada, the U.K. and other regions.
The Value rating for Rocky Brands is A, indicating that the stock is attractively valued. With a price-to-free cash flow ratio of 3.3, which is in the 6th percentile, and a price-to-sales ratio of 0.44, the stock appears to be a bargain investment. On the other hand, the earnings surprise rating is a C, indicating a neutral outlook for near-term earnings. Still, with a five-year compound annual growth rate of 12.8%, Rocky Brands shows strong long-term growth potential.
Skechers USA $SKX-9.6%
Skechers is known for its broad portfolio of footwear and apparel for all age groups. The company operates two main segments - wholesale and direct sales. Its products include advanced comfort technologies such as Skechers Hands Free Slip-ins and Air-Cooled Memory Foam, which attract customers looking for comfort and innovation.
Skechers has an A quality rating with a very strong F-Score and Z-Score that measure the risk of bankruptcy. With an F-Score of 7 and a Z-Score of 8.66, Skechers exhibits strong financial stability. The Value rating is a B, indicating a good valuation for the stock, although its Momentum rating of C indicates mediocre performance over the past four quarters. The company is achieving a nice annual sales growth of 11.5%, confirming its long-term growth potential.
Disclaimer: There is plenty of inspiration to be found on Bulios, but stock selection and portfolio construction is up to you, so always conduct a thorough analysis of your own.
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