Footwear Stocks Crushed: Which One is the Best Buy?
The footwear and athletic apparel sector has been hit hard in recent years due to persistent inflation and weaker discretionary spending. As a result, stocks such as Nike (NKE), Lululemon Athletica (LULU), Deckers (DECK), and On Holding (ONON) have all plummeted more than 50% from their all-time highs.
The sector has faced several challenges, including tariffs in the US and the end of pandemic-related tailwinds that drove spending on comfort apparel and footwear. However, with sell-offs come opportunities, and these stocks are now trading at attractive multiples.
Nike's collapse has been particularly painful, with the stock down over 75% from its pandemic-era peak. New CEO Elliott Hill has been at the helm for nearly two years but his turnaround efforts have yet to pay off.
Lululemon has also struggled, facing increased competition and declining sales in its Americas segment. However, it continues to deliver strong growth in international markets, including China.