Footwear Insight

Q2 PERSPECTIVE & ANALYSIS BUSINESS REPORT QUARTERLY U .S. stock market indicators were strong in Q2 as the BRQ footwear retailer and brand indexes rebounded from a rough start to 2025. e S&P 500 rose by 10.2 percent and the Dow Jones Industrial Average increased by 5.0 percent for the 13 weeks ended June 30. e NASDAQ Composite improved by more than 16 percent. Meanwhile, despite persistent market uncertainty over the impact of U.S.-imposed taris on footwear, the BRQ Retail Index peaked in Q2's nal week with a score of '99,' and the Brand Index nished the period at '84' aer peaking at '96' on the day aer Memorial Day. roughout Q2, the macroeconomic data and information about potential taris were mixed and both positive and negative, forcing senior executives at public footwear companies to abandon their FY25 outlooks and their peers to remain alert to constantly changing developments aer a tari lull that beneted stocks. Renewed uncertainty about the direction of tari rates for various countries could derail the positive momentum the markets have enjoyed in H1, opines some circles. Good news came to many footwear companies in early July when the U.S. reached a trade agreement with Vietnam, a major supplier to the industry, avoiding a potential 46 percent-imposed tari. Vietnam granted the U.S. total access to its economy for trade, and the U.S. will impose a 20 percent tari on all goods imported from the Asian country. at tari rate rises to 40 percent for any transshipping through Vietnam to the U.S. Of course, many footwear companies, fearful of the higher rate, had to import more Back-To-School and Holiday merchandise earlier than usual this year. On the interest rate and economic growth fronts, the Federal Reserve is expected to slash the federal interest rate to a range of 3.25-3.5 percent by year-end. e Fed has lowered its U.S. GDP forecasts for 2025 and 2026 to 1.4 percent and 1.6 percent, respectively, and hiked its outlook on yearly ination growth to 3 percent this year from its previous forecast of 2.7 percent made in March. And during the rst six months of 2025, while the DJIA rose by double digits, the U.S. dollar lost 10 percent of its value and U.S. retailers eliminated 80,000 jobs. Meanwhile, according to the Conference Board, U.S. consumer condence fell by 540 basis points in June to 93 percent from its May reading as people assessed current conditions and their short-term expectations for the economy. n MARKETS STEP FORWARD IN Q2 DESPITE MIXED MESSAGES 60 76 92 108 124 140 6/30/25 6/23/25 6/16/25 6/9/25 6/2/25 5/26/25 5/19/25 5/12/25 5/5/25 4/28/25 4/21/25 4/14/25 4/7/25 3/31/25 (QUARTER) (AVERAGE) n RETAILERS n BRANDS BY BOB MCGEE 28 • Footwear Insight ~ July/August 2025 footwearinsight.com

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