Footwear Insight - Business Report Quarterly

6 Footwear Insight Business Report Quarterly ~ Q2 July 8 2024 QUARTER 2 ENDING 6/24/24 footwearinsight.com A s t he c a lend ar commence d Q3 last Monday and family vacations, barbecues and 4th of July celebrations took center stage, there was some concern about what the next 13 weeks will have to offer investors and the entire shoe industry. While Axios was calling current market conditions 'a cooler economic state' with 'more muted consumer spending and slower price increases,' Nike senior executives were telling investors that it was prepared for a couple of challenging quarters through November. Rising concern about current and future business conditions, particularly among consumers aged 35 to 54, sent U.S. consumer confidence down slightly last month to 100.4, according to e Conference Board's monthly index. At nearly the same time, the latest report showed that monthly inflation eased to 2.6 percent in May. at result led some observers to believe that the Federal Reserve will not cut interest rates later this month for the first time in 2024, instead preferring to wait until later this year when the inflation rate is closer to its ideal 2 percent rate. e lack of action on interest rates will keep the cost of borrowing high for both businesses and consumers. Over Q1, while both the Brand and Retail Indexes moved to higher ground, the Dow Jones Industrial Average (DJIA) fell 155.64 between April 1 and June 24 but was essentially flat for the 13-week period at 39,411.21. e prospect of tighter consumer spending ahead of the crucial Back-To-School season must be worrisome for shoe retailers and brands. Nike is preparing to introduce more under $100 retail styles to reach more value-conscious shoppers and perhaps shave market share from some competitors. Bloated inventory levels that impaired the footwear industry over recent quarters are largely behind most companies now. Still, there are numerous companies working on turnaround strategies to ensure their relevance, profitability, and market standing in 2025 and beyond. Besides the Swoosh, the group includes Under Armour, Wolverine Worldwide, and Allbirds, and retailers Journeys and Sportsman's Warehouse. How their respective businesses unfold in the coming weeks certainly bears watching. n TURNAROUND STRATEGIES THAT BEAR WATCHING 80 88 96 104 112 120 6/24/24 6/17/24 6/10/24 6/3/24 5/28/24 5/20/24 5/13/24 5/6/24 4/29/24 4/22/24 4/15/24 4/8/24 4/1/24 (QUARTER) (AVERAGE) n RETAILERS n BRANDS BY BOB MCGEE

• Cover