The footwear market has been evolving rapidly with changing aesthetics and fashion trends. Furthermore, as people resume outdoor sports and fitness activities due to solid progress on the COVID-19 vaccination front, the footwear market is expected to witness significant sales growth. So, we think established industry players Under Armour (NYSE:UA) (UAA), Skechers U.S.A. (SKX), and Steven Madden (NASDAQ:SHOO) could be valuable additions to one’s portfolio now. However, we think NKE should be avoided, due to its weak fundamentals and stretched valuation. Read on.The increasing popularity of athleisure footwear amid an increasing trend in activities such as home workouts, yoga, running, and Pilates, has been shaping the footwear industry over the past year. In addition, because a robust rollout of vaccines has led to increased outdoor regular and fitness activities, despite the resurgence of COVID-19 cases, the demand for footwear is expected to remain strong.
Furthermore, continually evolving sports and fashion trends and increasing demand for unique and superior quality footwear should drive the footwear market’s growth. Robust customer spending and continued online shopping trends could help the industry see decent growth. The global footwear market is expected to grow at a 2.6% CAGR to $213.3 billion by 2026.
Under Armour, Inc. (UAA), Skechers U.S.A., Inc. (SKX), and Steven Madden, Ltd. (SHOO) are three fundamentally sound stocks in the footwear industry that we think have the potential to capitalize on the industry tailwinds. So, it could be wise to bet on them now. Conversely, we believe investors should avoid NIKE, Inc. (NKE) because its current valuation is not justified by the company’s bleak financials.